During simian virus 40 lytic infection there is a shift in initiation sites used to transcribe the early region, which encodes large T and small t antigens. Early in infection, transcription is initiated almost exclusively from sites that are downstream of the origin of DNA replication, whereas transcripts produced later are initiated mainly from sites on the upstream side. We have used mutant virus and specially constructed plasmid DNAs to investigate the factors regulating this transcriptional shift. In our studies simian virus 40 large T antigen appears to mediate the shift in transcription in two ways: first, T antigen represses transcription at the downstream sites late in infection by binding to the region where these RNAs are initiated; second, T antigen promotes transcription from sites on the upstream side by its ability to initiate replication or amplification, or both, of the template DNA. In addition, transcription from the downstream sites is heavily dependent on enhancer sequences located in the 72-base-pair repeat region, whereas transcription from the upstream sites late in infection does not require enhancer sequences. Thus, different overlapping promoters regulate simian virus 40 early-region expression in a manner that apparently coordinates the production of large T antigen with the increase in viral DNA.At present, the molecular mechanisms controlling gene expression in higher eucaryotes are only poorly understood. One of the best characterized systems which has been used to approach this problem is the early region of simian virus 40 (SV40) (1, 24, 56). The early region codes for two known proteins, large T antigen and small t antigen. Although the function of small t antigen remains obscure, large T antigen is known to be required for the initiation of viral DNA synthesis. These proteins are translated from differentially spliced RNAs which are transcribed, using the same promoter and polyadenylation signals. The SV40 early-region promoter is contained within a set of repeated segments adjacent to the origin of viral DNA replication (ori) (Fig. 1). Extensive analysis of this region has demonstrated the presence of three separate elements involved in SV40 early transcription (5, 16). At least one copy of a set of six short guanine-cytosine-rich repeats is necessary for early transcription. In addition, a sequence within the 72-base-pair (bp) repeat has been shown to be an essential element. Finally, a Goldberg-Hogness or TATA box sequence (19; M. Goldberg, Ph.D. thesis, Stanford University, Stanford, Calif., 1978), imbedded within a larger 17-bp adenine-thymine (AT)-rich block, is responsible for positioning the 5' ends of early RNA.The SV40 early region is also one of the best characterized examples of regulation mediated by a defined protein. Large T antigen regulates its own synthesis by controlling the level of early-region transcription (33, 53, 57). Furthermore, T antigen binds to SV40 DNA at three adjacent sites overlapping ori and the early promoter (Fig. 1) that T-antigen binding a...