Initiation of adenovirus transcription was analyzed by incubation of isolated nuclei from virus infected cells in the presence of beta-32P GTP or beta-32P ATP. Nucleotide analysis of RNA from nuclei incubated with beta-32P GTP shows that the label is incorporated exclusively into pppGp and ppGp. Under similar incubation conditions, the label from beta-32P ATP was incorporated primarily into the 5' phosphate of 5', 3' mononucleoside diphosphates, but label was also detected in pppAp, pppGp and in the 3' nucleoside monophosphates. Analysis of RNA, synthesized in the presence of different concentrations of alpha-amanitin, shows that only RNA polymerase III initiates virus specific transcription in isolated nuclei. The virus specific transcripts containing pppAp and pppGp in their 5' termini were identified as the 5.5S and 5.2S viral RNA species by hybridization and finger printing.