Koala populations are in decline in many regions of Australia, with disease, injury and habitat loss the main causes. Koala retrovirus (KoRV) is considered an important threat to koala health and survival. The nature of KoRV infection is complex, with apparently different patterns of infection and disease in different regions of the country. We investigated the nature of KoRV infection in two distinct koala populations, sampling 105 koalas in South Australia (SA) and 71 koalas in Queensland (QLD). The study analysed proviral (DNA) and plasma viral (RNA) levels, the completeness of proviral inserts and expression of viral genes, and the diversity of nucleotide sequence of the env gene. The association of these parameters with disease syndromes was investigated. SA koalas had lower mean proviral and viral loads than QLD koalas and many SA animals apparently possessed incomplete proviral inserts and expressed only some viral genes. There was an association between viral RNA loads and the presence of neoplasia in both populations, and QLD koalas with clinical chlamydiosis had higher proviral and viral loads than healthy QLD koalas. Diversity of env subtypes was high within individual koalas in both populations, in both proviral DNA in cells and in expressed viral RNA in plasma. KoRV-A was the predominant proviral subtype in SA and QLD koalas, and although it was also the predominant RNA subtype in SA, subtypes B and D were the predominant RNA subtypes in QLD. In contrast to findings of others, KoRV-B was not associated with neoplasia in either population. However, other subtypes in either proviral DNA or viral RNA forms showed associations with chlamydiosis and neoplasia. These results demonstrate even greater complexity of the host-virus relationship between KoRV and koalas than previously recognized. Hypotheses on the endogenous versus exogenous nature of KoRV infection in different koala populations are supported by some, but not all of our findings. Better understanding of this virus has potential to aid koala conservation programs.