The mouse mammary tumor virus long terminal repeat (MMTV-LTR) participates in the control of gene expression by providing a series of important DNA binding sites at which trans-acting factors interact. Among these factors are the steroid receptor, nuclear factor I (NFI) and the TATA box factor (TFIID). The binding of these proteins facilitates the assembly of a transcriptionally competent complex, that includes RNA polymerase II, and activates the expression of juxtaposed genes in cis. A particular DNA sequence, distinct from previously identified regulatory elements, was found in the present study to activate gene expression in trans. The sequence is located between nucleotides +3 and +43 near the 3' terminus of the LTR. This sequence binds a protein that may actively repress the expression of genes that are not located immediately in cis. This protein was purified by ion exchange chromatography and has an approximate molecular weight of 31,000 daltons, as judged by SDS-PAGE. Gel retardation experiments reveal that progressively larger protein--DNA complexes are formed when the amount of this factor is increased relative to the DNA binding site. Furthermore, this protein was found to preferentially aggregate DNA molecules containing the LTR sequence between bases +3 and +43. These results reveal the existence of a unique modulatory role for the LTR in regulating gene expression in trans.