Ie0 is the only gene of the baculovirus Orgyia pseudotsugata multiple nucleopolyhedrovirus (OpMNPV) that is known to be spliced. In this study, cDNAs of ie0 were isolated, cloned, and sequenced. It was observed that IE0 contains 35 amino acids (aa) added to the N-terminus of IE1. In addition, it was found that the leader sequence of ie0 contains a 4-aa minicistron. To functionally characterize IE0, ie0 cDNAs were expressed under control of either the ie1 or the ie0 promoter. Unexpectedly, examination of ie0 translation products revealed that the predominant product from ie0 mRNAs was not IE0, but IE1. Mutation analysis showed that IE1 translation was preferentially initiated from either of two AUGs found in the first 15 nucleotides (nt) of the ie1 ORF that are internal to the ie0 ORF. It is unknown whether the internal translation initiation occurs via a leaky scanning mechanism or by an internal ribosomal entry site. Transactivation analysis with constructs that had point mutations in the ie1 AUGs and were translated only as IE0 revealed that OpMNPV IE0 is a 14- to 15-fold stronger transactivator than IE1. IE0 was also shown to be autoregulatory and to transactivate early genes in an enhancer-independent or -dependent manner. These results suggest that differential expression of baculovirus early genes can be obtained by coexpression of IE0 and IE1 in infected cells, which may permit subtle regulation of specific sets of viral genes.