The major transcript of the yeast transposable element Tyl has its 5' end in one 8 and the 3' end in the opposite 8, the direct repeats of about 335 base pairs (bp) at each end of the element. The transcriptional initiation signals of the Ty-D15 element that give rise to this transcript were found to have a number of unusual characteristics. The 5' 8 by itself, which contained the initiation site for Ty transcription, gave no (27,35,49). The Tyl and Ty2 class of elements both have Bs, direct repeats of about 335 base pairs (bp), flanking the 5.2-kbp E region of the element (Fig. 1). Two regions in the E totaling 3 kbp that differ significantly in DNA sequence distinguish the Tyl and Ty2 classes. The similarity of Ty elements to vertebrate retroviruses at both the DNA and RNA levels first suggested a close relationship between these elements. The recent demonstrations that Ty transposes through an RNA intermediate (4), encodes retroviruslike proteins such as reverse transcriptase (7,19,28), and forms viruslike particles in the yeast cell (19, 28) have confirmed the relationship of these retrotransposons.In addition to their transposition mechanisms, Ty elements are also noteworthy for their transcriptional properties with regard to the elements themselves and their effects on expression of adjacent genes. Ty elements are highly transcribed to produce 5 to 10% of the poly ( enon (14,40,51). The Ty sequences essential for this increased expression are in the E downstream of the 5' 8 (15, 33, 36). DNA sequence analysis has shown that this internal activating region (IAR) contains sequences similar to those of the simian virus 40 enhancer that functions in cells of higher eucaryotes (15,36). However, recent work indicates that a region of the £ not containing similarities to the simian virus 40 enhancer may in fact activate the flanking gene (33). Several putative binding sites for the MATa2-MATal repressor are also present in the E and may be responsible for the mating-type regulation of genes activated by an inserted Ty element (15,16). These studies, then, indicate that sequences necessary for the ROAM effect are in the translated region of the Ty element.It seems possible that these sequences in the E may also play a role in transcription of the Ty element itself, especially since flanking genes and Ty elements both respond to mating-type signals (13,46). Liao et al. (24) and Fulton et al. (18) have in fact presented evidence that regions in the E as well as 8 sequences upstream of the initiation site are necessary for transcription of Ty elements. In this study, the transcriptional properties of a particular Tyl element, Ty-D15, were examined to determine the location of the required sequences. Transcription of this Ty element is shown to depend on an IAR. Another surprising observation is that transcription still occurs when the portion of the 8 upstream of the initiation site is replaced with other DNA fragments.MATERIALS AND METHODS Strains. Yeast strain YL7 (YNN211 [40], MATa ura3-52 his3A200) was use...