A cis-acting enhancer element has been detected within the gag gene of several avian retroviruses, including Rous sarcoma virus, Fujinami sarcoma virus, and the endogenous Rous-associated virus-0. A consensus enhancer core sequence, GTGGTTTG, is present in all of these viral genomes, approximately 900 bases downstream from the site of initiation of transcription. When an internal fragment derived from the gag gene of any of these viruses (spanning nucleotides 533 to approximately 1149) was inserted into a plasmid containing the chloramphenicol acetyltransferase (cat) gene under control of the simian virus 40 promoter, 9-or 21-fold enhancement of CAT expression was observed after transfection into mouse L cells and chicken embryo fibroblasts, respectively. This enhancement was not dependent on the position of insertion of the gag fragment into the plasmid. However, there was a strong dependence on orientation, with higher levels of CAT expression in constructs in which the 5' end of the gag fragment was nearest to the promoter, suggesting a possible negative regulatory element at the 3' end of this fragment. Deletion of the 3' end of the insert resulted in a gag fragment, containing nucleotides 533 to 1017, which enhanced expression equally in either orientation. When the gag fragment was inserted into a plasmid containing the cat gene under the control of an intact Rous sarcoma virus long terminal repeat, it induced a two-to threefold increase in CAT activity and CAT mRNA levels.Translation of the gag fragment did not appear to be necessary for the observed enhancement, since two insertional mutations resulting in frameshifts in the gag insert did not affect CAT expression. However, deletion of a 330-base internal fragment from the gag insert restored a basal level of CAT activity. These results suggest that retroviruses have regulatory elements within their genes distinct from those in the long terminal repeats that flank the genes.Previous work on the regulation of retroviral gene expression has focused on the long terminal repeats (LTRs) at both ends of the integrated proviral DNA. The LTRs contain sequences regulating both initiation and termination of transcription (46). Both transcriptional enhancers and promoters have been characterized within the unique 3' (U3) region of retroviral LTRs (6,13,24,25,28,46). In addition to promoting transcription of viral genes, the LTRs of a number of different retroviruses are capable of activating the transcription of contiguous cellular genes, sometimes resulting in neoplasia (16,32). When the strengths of different avian retroviral LTR enhancers are compared, the LTR of the endogenous avian virus Rous-associated virus-0 (RAV-0) is less than 10% as active as the LTR of Rous sarcoma virus (RSV), whereas the LTR of Fujinami sarcoma virus (FSV) has an intermediate level of expression (5, 7, 44, 45, 51).There are several suggestions that sequences within the retroviral genome may also be important in regulating viral gene expression. For example, sequences in the 3' noncod...