Previously, we sequenced the HSV-1 Ul39-Ul40 homologue genes of Aujeszky's disease virus (ADV), also designated as pseudorabies virus (Kaliman et al., 1994a, b). Now we report the nucleotide sequence of the adjacent DNA that encodes Ul38, the 5'-region (750 bp) of Ul37, and the promoter regions between these divergently arranged two genes. The ADV Ul38 gene encodes a protein of 368 amino acids. Amino acid sequence comparison of ADV Ul38 with that of other herpesviruses revealed significant structural homology. In a transcription study using RNase protection assay and Northern blot hybridization, we found that the Ul38 gene had one initiation site, but the Ul37 gene was initiated at two transcription sites with two potential initiator AUGs, one of which was dominant. Comparison of ADV Ul37, Ul38 and ribonucleotide reductase gene expression showed that these genes belong to the same temporal class with early kinetics. Data of structural and transcriptional studies suggest that regulation of the expression of these two ADV genes could differ from that of the HSV-1 virus.