The human T-cell leukemia virus (HTLV) types I and II are associated with specific hematological cancers. These viruses rapidly transform normal T-lymphocytes in vitro. The mechanism of HTLV-induced leukemogenesis is unknown. Structural analysis of HTLV-I and HTLV-II has revealed sequences of unknown function, termed X, at the 3' end of the proviral genome. The distal two-thirds of the X sequences are highly conserved between HTLV-I and HTLV-II. We have shown that these conserved X sequences contain a gene, termed x, that is expressed in both HTLV-I and HTLV-II by identifying a subgenomic X RNA as well as the proteins encoded by these messages. The function of this unique x gene is unknown; however, its conservation and expression suggest that it may play a role in HTLV replication and in HTLV-induced leukemogenesis.