The vaccinia virus growth factor (VGF) gene encodes a polypeptide with amino acid sequence homology to epidermal growth factor (EGF) and transforming growth factor alpha and is present twice, once at each end of the virus genome within the inverted terminal repetition. Recombination procedures were used to replace more than half of both VGF genes with a beta-galactosidase cassette which served as a color indicator for isolating an unconditionally viable VGF- mutant. The VGF- mutant genotype and phenotype were confirmed by Southern blot analysis and assays for functional growth factor. The plaque-forming efficiencies of VGF- and wild-type (WT) viruses were similar in a variety of cell types containing low or high densities of EGF receptors, suggesting a lack of a specific requirement for either VGF or the EGF receptor in the initiation of virus infection. The yield of VGF- virus was similar to that of WT virus in growing BS-C-1 and Swiss 3T3 cells, but lower in resting Swiss 3T3 cells. The greatest differences between VGF- and WT virus occurred in vivo: higher doses of VGF- virus than WT virus were required for intracranial lethality in mice and for production of skin lesions in rabbits. Thus, expression of the VGF gene is important to the virulence of vaccinia virus.