A single copy of the retrotransposon TED was found integrated within the DNA genome of the insect baculovirus, Autographa californica nuclear polyhedrosis virus. After excision of the element from the viral genome, a single long terminal repeat (LTR) remained behind. We have examined the effect of this solo TED LTR on the local pattern of viral transcription. Most prominent was the transcription of two sets of abundant RNAs; both originated within the LTR but extended in opposite directions into flanking viral genes. By promoting symmetric transcription of adjacent genes, the solo LTR has the capacity to activate or repress gene expression in two directions. Primer extension analysis demonstrated that the divergent LTR transcripts were initiated near the same point within a 22-base-pair sequence having hyphenated twofold symmetry. Analogous symmetries at the initiation sites of other retrotransposon LTRs, including copia and Ty, suggested that these sequences serve to establish the precise start for transcription.The retrotransposons represent a group of eucaryotic transposable elements which bear a striking resemblance to the retroviral proviruses (for review, see reference 1). These elements, which include copia and copia-related transposons of Drosophila melanogaster and Ty of Saccharomyces cerevisiae, are flanked at both ends by long terminal repeats (LTRs). The LTRs carry signals necessary for initiation and termination of transcription. The transcribed internal portion of these elements contains several retroviruslike genes, including a gene (pol) with homology to reverse transcriptase (5, 9, 29, 38). In the case of Ty, the full-length RNA extending, from LTR to LTR is copied into DNA by a process identical to that of the retroviruses, suggesting that transposition occurs through reverse transcription of an RNA intermediate (3).By virtue of their ability to integrate randomly into the host genome and alter expression of nearby genes, the retroviruses represent an important class of insertion mutagens (for review, see reference 44). Similarly, the retrotransposons cause insertion mutations in D. melanogaster and S. cerevisiae (reviews in references 35 and 37). Integration within regulatory regions or introns of various genes has resulted in enhancement or inhibition of expression. These alterations occur at the level of transcription and are presumably due to insertion of new promoters, termination signals, or both, located within the retrotransposon. The mutagenic effects of inserted copia, gypsy, and Ty elements are suppressed by additional mutations at unlinked loci which restore transcription of the affected genes to wild-type levels (25,32,51). Mutation of the S. cerevisiae SPT3 (suppressor of Ty) gene, for instance, abolishes normal Ty transcription, which suggests that the mutational effect of certain Ty insertions is due to transcription originating from the element (51). The exact mechanisms involved are still unclear.TED is the first copia-related transposable element iden-