The genome of the large icosahedral DNA virus, frog virus 3 (FV3), is heavily methylated at the cytosine residues of dCdG dinucleotide pairs, with more than 22% of the total cytosine residues in the form of 5-methylcytosine (5mC). This methylation is carried out postreplicatively in the cytoplasm of infected cells by a virus-encoded DNA methyltransferase. DNA methyltransferase activity was shown to copurify with a 26 kD virus-induced, DNA-binding protein that had an altered mobility in extracts from cells infected with a DNA-methyl-transferase deficient mutant of FV3. Immediately after infection, the highly methylated parental DNA is transcribed in the nucleus by the host cell RNA polymerase II. As FV3 induces the synthesis of a protein that can override the inhibitory effect of methylation on the transcription of exogenous promoters methylation in vitro, we suggest that this protein is a factor evolved by this virus to allow transcription from methylated promoters by eukaryotic RNA polymerase II.