Understanding the factors governing host species barriers to virus transmission has added significantly to our appreciation of virus pathogenesis. Jaagsiekte sheep retrovirus (JSRV) is the causative agent of ovine pulmonary adenocarcinoma (OPA), a transmissible lung cancer of sheep that has rarely been found in goats. In this study, in order to further clarify the pathogenesis of OPA, we investigated whether goats are resistant to JSRV replication and carcinogenesis. We found that JSRV induces lung tumors in goats with macroscopic and histopathological features that dramatically differ from those in sheep. However, the origins of the tumor cells in the two species are identical. Interestingly, in experimentally infected lambs and goat kids, we revealed major differences in the number of virus-infected cells at early stages of infection. These differences were not related to the number of available target cells for virus infection and cell transformation or the presence of a host-specific immune response toward JSRV. Indeed, we also found that goats possess transcriptionally active endogenous retroviruses (enJSRVs) that likely influence the host immune response toward the exogenous JSRV. Overall, these results suggest that goat cells, or at least those cells targeted for viral carcinogenesis, are not permissive to virus replication but can be transformed by JSRV.