The role of long terminal repeat (LTR) sequences in the efficient expression of Moloney murine sarcoma virus (MSV-124) transforming gene function was investigated. Recombinant plasmids containing a single LTR positioned 3′ of v-mos were subjected to sequential deletions, and the relative transforming efficiency of these recombinants was analyzed in the NIH/3T3 transfection assay. Recombinants lacking CAAT, TATA, and poly(A) signals within the LTR were able to transform with an efficiency comparable to that of the wild-type MSV-124 genome. Deletion of one of the two 74-bp tandem repeat units within the LTR did not abolish v-mos gene function, whereas removal of both 74-bp repeat units completely eliminated transforming activity. The addition of a fragment containing only a single 74-bp unit and 29-bp downstream sequences derived from the LTR to a position 3′ of v-mos led to efficient activation of v-mos transforming function. Residual potentiating activity for v-mos expression was retained even when the distance between v-mos and the 3′ LTR was increased by several kilobase pairs. All these findings are consistent with the concept that the potentiating action of the LTR in its 3′ position is due to activator/enhancer sequences localized to one of its 74-bp repeats. A permuted MSV-124 molecule, whose single LTR was localized 5′ of v-mos, was very inefficient at transformation. However, its transforming activity could be increased by approximately 1000-fold by tandemization of the molecule. These results suggest that the transcript for the MSV-124 transforming gene is not normally initiated within the 5′ LTR, but instead utilizes promoter signals in close proximity to v-mos and enhancer elements localized in the 3′ LTR.