Marek's disease virus has a unique phosphoprotein, pp38, which is suspected to play an important role in Marek's disease pathogenesis. The objective of the present study was to utilize a mutant virus lacking the pp38 gene (rMd5Deltapp38) to better characterize the biological function of pp38. This work shows that the pp38 gene is necessary to establish cytolytic infection in B cells but not in feather follicle epithelium, to produce an adequate level of latently infected T cells, and to maintain the transformed status in vivo.