The experiments reported here show that the p27 product of the rex gene that is encoded by the 3' end of the human T cell leukemia virus type I (HTLV-I) is required for expression of the virion capsid and envelope proteins. The regulation of virion protein expression occurs via posttranscriptional regulation of viral mRNA. In some contexts, regulation of the virion proteins is achieved by p27rex-dependent accumulation of unspliced or singly spliced mRNAs that specify capsid or envelope proteins. In other contexts, the envelope protein production is dependent upon p27rex even in the presence of accumulation of envelope-specific mRNA. The consequences of p27 regulation for HTLV-I replication are discussed.