Simian foamy virus type 1 (SFV-1), a member of the Spumavirinae subfamily of retroviruses, encodes a transcriptional transactivator (taf) that strongly augments gene expression directed by the viral long terminal repeat (LTR) (A. Mergia, K. E. S. Shaw, E. Pratt-Lowe, P. A. Barry, and P. A. Luciw, J. Virol. 65:2903-2909, 1991). This report describes cis-acting regulatory elements in the LTR that control viral gene expression. A series of LTR mutants and hybrid promoter constructs have been analyzed in transient expression assays for responsiveness to Taf. The targets for transactivation have been mapped to two regions of the U3 domain of the LTR, between positions -1196 and -880 and between positions -403 and -125 (+1 represents the transcription initiation site). No significant nucleotide sequence homology between these two regions is noted; thus, the SFV-1 taf gene acts through at least two distinct sequence elements in the LTR. The target contained between positions -403 and -125 acts independently of orientation, in different cell types and species, and in the context of a heterologous promoter. Thus, the target element between positions -403 and -125 has properties of a transcriptional enhancer. The observation that two distinct elements in the SFV-1 LTR are targets for transcriptional transactivation is novel with respect to observations for other retroviral systems. The R-U5 region of the SFV-1 LTR down-regulates transactivation by severalfold. Computer analysis of the R-U5 region revealed a secondary structure with a free-energy level of -74 kcal (ca. -310,000 J); this structural feature may account for the inhibitory effect on gene expression directed by the LTR. Taf of SFV-1 had no effect on gene expression directed by the LTR of the related human foamy virus, whereas Taf transactivates gene expression directed by the LTRs of the human and simian immunodeficiency viruses. Comparative functional analysis of Taf on homologous and heterologous LTRs may facilitate elucidation of the mechanism of transactivation of foamy viruses.