We have characterized the structure of the erythropoietin receptor gene promoter in normal murine erythroid tissues and in Friend-induced tumor cells. Using primer extension analysis, we identified two distinct transcriptional start sites, which were located 2 base pairs apart in anemic spleens, fetal liver, Friend-induced tumoral spleens, and mouse erythro-leukemia cells. In contrast, transcription was initiated 37 base pairs upstream of the normal cap sites in T3Cl-2, a Friend virus-induced murine erythroleukemia cell line. Also, the erythropoietin receptor mRNA in T3Cl-2 was overexpressed when compared with other erythroleukemia cell lines. We found that abnormal transcription occurring in T3Cl-2 cells resulted from an erythropoietin receptor gene alteration. Indeed, one erythropoietin receptor allele was rearranged by insertion of a spleen focus-forming virus long terminal repeat within the noncoding region of the first exon, 45 bases upstream of the ATG initiation codon and in the same 5'----3' orientation. The transcription of the rearranged allele was shown to be directed from the long terminal repeat promoter, leading to a long terminal repeat-erythropoietin receptor fusion transcript, whereas the normal erythropoietin receptor allele was weakly transcribed. Such altered receptor gene activation may provide a positive pressure in the development of tumorigenic erythroleukemia.