Incomplete splicing is essential for retroviral replication; and in simple retroviruses, splicing regulation appears to occur entirely in cis. Our previous studies, using avian sarcoma virus, indicated that weak splicing signals allow transcripts to escape the splicing pathway. We also isolated a series of avian sarcoma virus mutants in which env mRNA splicing was regulated by mechanisms distinct from those of the wild-type virus. In vitro splicing experiments with one such mutant (insertion suppressor 1 [IS1]) revealed that exon 1 and lariat-exon 2 intermediates were produced (step 1) but the exons were not efficiently ligated (step 2). In this work, we have studied the mechanism of this second-step block as well as its biological relevance. Our results show that the second-step block can be overcome by extending the polypyrimidine tract, and this causes an oversplicing defect in vivo. The requirement for regulated splicing was exploited to isolate new suppressor mutations that restored viral growth by down-regulating splicing. One suppressor consisted of a single U-to-C transition in the polypyrimidine tract; a second included this same change as well as an additional U-to-C transition within a uridine stretch in the polypyrimidine tract. These suppressor mutations affected primarily the second step of splicing in vitro. These results support a specific role for the polypyrimidine tract in the second step of splicing and confirm that, in a biological system, uridines and cytosines are not functionally equivalent within the polypyrimidine tract. Unlike the wild-type virus, the second-step mutants displayed significant levels of lariat-exon 2 in vivo, suggesting a role for splicing intermediates in regulation. Our results indicate that splicing regulation can involve either the first or second step.Pre-mRNA splicing involves the accurate removal of introns and joining of exons (see references 14, 28, and 37 for reviews). In higher eukaryotes, these reactions require several degenerate cis-acting signals: the 5Ј splice site (AG/GURAGU), the 3Ј splice site (CAG/G), the branch point sequence (BPS; YNYU RAC), and the polypyrimidine tract (Y) n (Fig. 1A). These signal sequences are recognized by nuclear trans-acting factors: small nuclear ribonucleoprotein particles (snRNPs) and nonsnRNP protein factors. The U1, U2, U4, U5, and U6 snRNPs and other factors bind directly, or indirectly, to the pre-mRNA in an ordered manner, ultimately forming a large complex known as the spliceosome. The U1 snRNP initially recognizes the 5Ј splice site, and the U2 snRNP recognizes the BPS, both through RNA-RNA base pairing. The polypyrimidine tract is required for spliceosome formation, and one function of this element is to recruit a protein, U2AF, that stabilizes the binding of the U2 snRNP (21, 49). The polypyrimidine tract may also play an indirect role in selecting the 3Ј splice site through a scanning mechanism (40, 42). The functional strength of the polypyrimidine tract has been correlated with its length, pyrimidine content, a...