We demonstrated that SV40 late gene expression is trans-activated by the SV40 early gene product, T-antigen, in the absence of DNA replication. RNA analysis demonstrates that activation occurs at the transcriptional level. Using deletion and points mutants, two important domains from the SV40 T-antigen-induced late gene expression have been identified. One of these includes T-antigen binding sites I and II (SV40 m.p. 5171-0), while the other is located in the SV40 72-bp repeat (SV40 m.p. 128-272). To determine how the two upstream control elements interact to effect T-antigen dependent trans-activation, we have used template competition analysis. In the presence of increasing levels of competitor DNA fragments, which are capable of binding limiting trans-acting factors, a decrease in expression from a fixed amount of template was observed. In vivo competition with recombinant plasmids containing the entire SV40 late regulatory region and promoter sequences (m.p. 5171-272) results in quantitative removal of limiting trans-acting factor(s). Deletion of either the T-antigen binding sites (m.p. 5171-5243) or the 72-bp tandem repeat (m.p. 128-272) from the competitor plasmid results in markedly less efficient binding of the trans-acting factor. Cotransfection of two separate plasmids, one containing the T-antigen binding sites I and II and the other the 72-bp repeats, fails to induce competition for the trans-acting factors. Insertion of DNA sequences between the T-antigen binding sites and the enhancer sequences also dramatically reduces the efficiency of competition. These results suggest that efficient binding of trans-acting factors requires the presence, in cis, of at least two SV40 regulatory domains. Our studies further suggest that the distance separating these two transcriptional signals is important.