We determined the effect of mutations generated in HIV-1 LTR on viral gene expression in six mother-infant pairs following vertical transmission. We show that the functional domains critical for LTR function, the promoter (TATAA), enhancers (three SpI and two NFkappaB sites), the modulatory region (two AP-I sites, two NFAT, one NF-IL6 site, one Ets-1, and one USF-1) and the TAR region were generally conserved among mother-infant pairs, although we observed several patient and pair specific mutations in these important domains. We then determined the promoter activity of our mother-infant LTR sequences by measuring CAT gene expression, which was driven by these LTRs and found that most of these HIV-1 LTRs derived from 6 mother-infant pairs were functional. However, mutations in the important transcription factor binding sites, including TATAA, SpI, NFkappaB, AP-I, NFAT, NF-IL6, Ets-1, USF-1 and TAR resulted in reduced LTR driven CAT gene expression. Taken together, conservation of functional domains in the LTR during vertical transmission supports the notion that a functional LTR is critical in viral replication and pathogenesis and mutations generated during the course of infection correlated with HIV-1 gene expression.