Sensory neurons within trigeminal ganglia (TG) are the primary site for bovine herpesvirus 1 (BHV-1) latency. During latency, viral gene expression is restricted to the latency-related (LR) gene and the open reading frame ORF-E. We previously constructed an LR mutant virus that expresses LR RNA but not any of the known LR proteins. In contrast to calves latently infected with wild-type (wt) BHV-1 or the LR rescued virus, the LR mutant virus does not reactivate from latency following dexamethasone (DEX) treatment. In this study, we demonstrated that bICP0, but not bICP4, transcripts were consistently detected in TG of calves infected with the LR mutant or LR rescued virus following DEX treatment. Calves latently infected with the LR rescued virus but not the LR mutant virus expressed late transcripts, which correlated with shedding of infectious virus following DEX treatment. The bICP4 and bICP0 genes share a common immediate-early promoter, suggesting that this promoter was not consistently activated during DEX-induced reactivation from latency. The bICP0 gene also contains a novel early promoter that was activated by DEX in mouse neuroblastoma cells. Expression of a cellular transcription factor, C/EBP-alpha, was stimulated by DEX, and C/EBPalpha expression was necessary for DEX induction of bICP0 early promoter activity. C/EBP-alpha directly interacted with bICP0 early promoter sequences that were necessary for trans activation by C/EBP-alpha. In summary, DEX treatment of latently infected calves induced cellular factors that stimulated bICP0 early promoter activity. Activation of bICP0 early promoter activity does not necessarily lead to late gene expression and virus shedding.