Merkel cell polyomavirus (MCV) is a virus discovered in our laboratory at the University of Pittsburgh that is monoclonally integrated into the genome of approximately 80% of human Merkel cell carcinomas (MCCs). Transcript mapping was performed to show that MCV expresses transcripts in MCCs similar to large T (LT), small T (ST), and 17kT transcripts of SV40. Nine MCC tumor-derived LT genomic sequences have been examined, and all were found to harbor mutations prematurely truncating the MCV LT helicase. In contrast, four presumed episomal viruses from nontumor sources did not possess this T antigen signature mutation. Using coimmunoprecipitation and origin replication assays, we show that tumor-derived virus mutations do not affect retinoblastoma tumor suppressor protein (Rb) binding by LT but do eliminate viral DNA replication capacity. Identification of an MCC cell line (MKL-1) having monoclonal MCV integration and the signature LT mutation allowed us to functionally test both tumor-derived and wild type (WT) T antigens. Only WT LT expression activates replication of integrated MCV DNA in MKL-1 cells. Our findings suggest that MCV-positive MCC tumor cells undergo selection for LT mutations to prevent autoactivation of integrated virus replication that would be detrimental to cell survival. Because these mutations render the virus replication-incompetent, MCV is not a "passenger virus" that secondarily infects MCC tumors.