Transposable elements have the capacity to affect expression neighboring cellular genes, and thus possess the potential to increase genetic diversity by altering gene regulation. We have discovered a novel example of genetic variation, in which an endogenous mouse provirus has conferred hormonal regulation on the adjacent sex-limited protein (Slp) gene. Slp arose from a tandemly duplicated fourth component of complement (C4) gene within the major histocompatibility complex. In contrast to C4, Slp lacks complement activity and has acquired androgen regulation, apparently from cis-acting sequences within the proviral LTR. This ancient provirus provides a unique tool for determining the extent of proviral imposition of hormonal regulation in the mouse genome. Elements similar in structure and DNA sequence to the provirus upstream of Slp will be examined to delineate a relationship of putative members of this proviral family and elucidate their history before and after chromosomal integration. Related proviruses will be tested for an ability to transcribe following gene transfer, particularly in response to hormones; chromosomal flanking sequences of responsive elements will lead directly to candidate genes whose expression may be influenced by proviral insertion. Characterization of such genes therefore will reveal the significance of transposons in regulatory variation. These proviruses also provide tags for tracing molecular events that underlie diversification and polymorphism within complex loci. In particular, Slp is a member of a small gene family in the major histocompatibility complex, within which polymorphism is of extraordinary selective value. By examining divergence in this region during Mus speciation, the provirus upstream of Slp may provide insight into mechanisms generating this variation.
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