The multifunctional protein of papovaviruses, T-antigen, regulates the virus lytic cycle partly by exerting transcriptional control over viral and cellular gene expression. In this study, the ability of the T-antigen of human neurotropic JC virus (JCV) to enhance expression from the virus late promoter has been further examined. By deletion analysis, a T-antigen-responsive region was mapped within the JCV 98 bp enhancer/promoter between nucleotides 139 and 168. Interestingly, T-antigen appears to mediate transactivation by increasing expression from a basal transcriptional initiation site and through a novel T-antigen-dependent initiation site (TADI). The TADI element contains a region homologous to initiator (Inr) sequences and is sufficient to confer T-antigen responsiveness to a heterologous minimal promoter. Electrophoretic mobility shift and UV crosslinking analyses demonstrate that multiple cellular proteins interact with both single- and double-stranded forms of this sequence. Mutations within the TADI element which abolish T-antigen-mediated transcriptional activation also prevent the formation of specific nucleoprotein complexes. These data suggest that the ability of JCV T-antigen to regulate JCV late gene expression may be partly due to the formation of specific nucleoprotein complexes and transcriptional initiation from the TADI site on the viral promoter.