Human T-cell lymphotropic virus type 1 (HTLV-1) is the etiologic agent of adult T-cell leukemia and HTLV-1-associated myelopathy. Novel, yet conserved RNA transcripts encoded from open reading frames (ORFs) I and II of the viral pX region are expressed both in vitro and in infected individuals. The ORF I mRNA encodes the protein p12(I), which has been shown to localize to cellular endomembranes, cooperate with bovine papillomavirus E5 in transformation, as well as bind to the IL-2 receptor beta and gamma chains and the H+ vacuolar ATPase. It is unknown what role p12(I) plays in the viral life cycle. Using an infectious molecular clone of HTLV-1 (ACH) and a derivative clone, ACH.p12(I), which fails to produce the p12(I) message, we investigated the importance of p12(I) in infected primary cells and in a rabbit model of the infection. ACH.p12(I) was infectious in vitro as shown by viral passage in culture and no qualitative or quantitative differences were noted between ACH and ACH.p12(I) in posttransfection viral antigen production. However, in contrast to ACH, ACH.p12(I) failed to establish persistent infection in vivo as indicated by reduced anti-HTLV-1 antibody responses, failure to demonstrate viral p19 antigen production in peripheral blood mononuclear cell (PBMC) cultures, and only transient detection of provirus by polymerase chain reaction in PBMC from ACH.p12(I)-inoculated rabbits. These results are the first to show the essential role of HTLV-1 p12(I) in the establishment of persistent viral infection in vivo and suggest potential new targets in antiviral strategies to prevent HTLV-1 infection.