Infection of human or murine cells with murine leukemia viruses rapidly increases the expression of a number of genes that belong to the immunoglobulin superfamily and are involved in T-lymphocyte activation, including the class I major histocompatibility complex antigens. We have reported recently that the long terminal repeat (LTR) of Moloney murine leukemia virus encodes a trans activator which induces transcription and expression of class I major histocompatibility complex genes and certain cytokine genes. The portion of the LTR responsible for trans activation was mapped by deletions to lie within the U3 region. We demonstrate here that a transcript is initiated within the U3 region and that its presence correlates with the trans-activating activity. Analysis of the LTR region reveals a potential internal promoter element for RNA polymerase III transcription within the U3 region. Studies with polymerase inhibitors suggest that this LTR transcript, designated let (LTR-encoded trans activator), is a product of RNA polymerase III. The mechanisms whereby RNA leukemia viruses cause lymphoid neoplasia after a long latent period have been extensively studied but are only partially understood. The region of the LTR identified here as being important in trans activation has recently been shown to be a critical determinant of the leukemogenicity and latency of Moloney murine leukemia virus. These findings suggest a novel mechanism of retrovirus-induced activation of cellular gene expression, potentially contributing to leukemogenesis.