CCAAT/enhancer-binding protein (C/EBP)  and C/EBP sites in the HIV-1 long terminal repeat (LTR) are crucial for HIV-1 replication in monocyte/macrophages and for the ability of interferon  (IFN) to inhibit ongoing active HIV replication in these cells. This IFN-mediated down-regulation involves induction of the truncated, dominant-negative isoform of C/EBP referred to as liver-enriched transcriptional inhibitory protein (LIP). Although binding of the C/EBP isoform to C/EBP sites in the simian immunodeficiency virus (SIV) LTR has previously been examined, the importance of these sites in core promoter-mediated transcription, virus replication, IFN-mediated regulation, and the relative binding of the two isoforms (C/EBP and LIP) has not been investigated. Here, we specifically examine two C/EBP sites, JC1 (؊100 bp) and DS1 (؉134 bp), located within the minimal region of the SIV LTR, required for core promoter-mediated transcription and virus replication in macrophages. Our studies revealed that the JC1 but not DS1 C/EBP site is important for basal level transcription, whereas the DS1 C/EBP site is imperative for productive virus replication in primary macrophages. In contrast, either JC1 or DS1 C/EBP site is sufficient to mediate IFN-induced down-regulation of SIV LTR activity and virus replication in these cells. We also characterized the differential binding properties of C/EBP and LIP to the JC1 and DS1 sites. In conjunction with previous studies from our laboratory, we demonstrate the importance of these sites in virus gene expression, and we propose a model for their role in establishing latency and persistence in macrophages in the brain.