The highly divergent SRLV genotype E has recently been characterized in Italy as a low pathogenic caprine lentivirus in the Roccaverano breed. The availability of a genotype specific diagnostic test based on a comparative assay, using a combination of genotype specific recombinant antigens allows a wide serosurvey in other goat populations. The island of Sardinia still has the highest small ruminant population of any Italian region and crossbreeding has been limited to goats, mainly with the Maltese breed. A serological survey was carried out on sheep flocks and goat herds, using individual sera as well as a bulk milk-adapted procedure. Genotype E was identified inmore than 50% of goat herds and none of the sheep flocks thus supporting the idea that this genotype is specifically associated with the goat species. The full-length proviral sequence of a Sardinian isolate revealed and confirmed the deletion of dUTPase subunit and the absence of both vpr gene and the 71 bp repeat of the LTR. Genetic similarity of this isolate with the prototype strain Roccaverano was not more than 84%, supporting the designation of two subtypes within genotype E. Nevertheless, in vitro properties of the Sardinian strain were different from those of the Roccaverano strain in terms of ability to infect synovial membrane and produce syncitia. Remarkable differences in the HV1 and HV2 of the env gene were recorded, with the Sardinian isolate displaying sequence motif more similar to arthritic strains. Data presented suggest diffusion of genotype E is wider than previously thought.