The mouse mammary tumor virus (MMTV) long terminal repeat (LTR) open reading frame (ORF) encodes a negative acting factor (naf). In our test system, naf mediates its effect in trans on another MMTV provirus in which the 5' LTR has been replaced by that of Rous sarcoma virus. naf effects are evidenced at the level of transcriptional initiation rather than as reduced mRNA stability. The introduction of a premature termination codon into the MMTV LTR-encoded ORF abolishes the transcriptional down regulation localizing naf within the ORF. In addition, sequences in the gag/pol genes between +320 and +646 and between +3626 and +4590 relative to the site of transcription initiation are also involved in the MMTV-mediated transcriptional down regulation.