Human T-cell leukemia virus type I (HTLV-I) and bovine leukemia virus (BLV) are related retroviruses that both encode two regulatory proteins, termed Tax and Rex, that interact with specific cis-acting sequences to control virus transcription initiation and mRNA accumulation, respectively. The Rex protein is required for the cytoplasmic accumulation of viral mRNAs encoding structural proteins and is predicted to bind sequence elements at the 3' end of the viral RNA. To better understand the molecular basis of Rex action, HTLV-I and BLV proviruses, Rexdeficient proviral mutants, and Rex expression plasmids were constructed. The effects of Rex mutations were analyzed in transfected cells by Northern blotting of RNA and Western immunoblotting of viral proteins. It was observed that Rexdeficient proviruses did not express viral structural proteins, but rather overexpressed the transcriptional activator protein, Tax. The partially-purified HTLV-I Rex protein, expressed in bacteria, was shown to bind to a structured RNA element in vitro. This cis-acting sequence encoded in the 3' long terminal repeat is termed the RxRE. Finally, we have begun to analyze the transcription pattern of HTLV-I using the highly sensitive method of cDNA-polymerase chain reaction. Specific segments of cDNAs synthesized in cells transfected with the cloned HTLV-I provirus were sequenced.