To develop a reporter system to study the response of an integrated retroviral LTR and cellular and viral events which influence transcription, the 5' LTR of HTLV-1 was coupled to the Escherichia coli beta-galactosidase gene (lacZ). This construct was assembled within a vector containing the neomycin resistance gene controlled by the SV40 promoter, and introduced into HeLa cells. Expression from the LTR in one clone was upregulated by positive regulators of HTLV-1 expression, including 12-O-tetradecanoylphorbol-13-acetate (TPA) and the HTLV-1 transregulatory protein (tax), as has been previously reported using transient transfection assays. This method proved to be a rapid and reproducible assay for the measurement of integrated viral LTR activation in a single cell system.