Intron 9 contains the complete endogenous retrovirus HERV-K(C4) as a 6.4-kb insertion in 60% of human C4 genes. The retroviral insertion is in reverse orientation to the C4 coding sequence. Therefore, expression of C4 could lead to the transcription of an antisense RNA, which might protect against exogenous retroviral infections. To test this hypothesis, open reading frames from the HERV sequence were subcloned in sense orientiation into a vector allowing expression of a beta-galactosidase fusion protein. Mouse L cells which had been stably transfected with either the human C4A or C4B gene both carrying the HERV insertion (LC4 cells), and L(Tk-) cells without the C4 gene were transiently transfected either with a retroviral construct or with the wild-type vector. Expression was monitored using an enzymatic assay. We demonstrated that (1) HERV-K(C4) antisense mRNA transcripts are present in cells constitutively expressing C4, (2) expression of retroviral-like constructs is significantly downregulated in cells expressing C4, and (3) this downregulation is further modulated in a dose-dependent fashion following interferon-gamma stimulation of C4 expression. These results support the hypothesis of a genomic antisense strategy mediated by the HERV-K(C4) insertion as a possible defense mechanism against exogenous retroviral infections.