During the last decade, new data accumulated describing the early events during herpes simplex virus 1 (HSV-1) replication occurring before capsid formation and virion envelopment. The HSV virion carries its own specific transcription initiation factor (alpha-TIF), which functions together with other components of the cellular transcriptase complex to mediate virus-specific immediate early (IE) transcription. The virus-coded IE proteins are the transactivator and regulatory elements modulating early transcription and subsequent translation of nonstructural virus-coded proteins needed mainly for viral DNA synthesis and for the supply of corresponding nucleoside components. They also cooperate at the late transcription and translation of the virion (capsid, tegument and envelope) proteins. In addition, the transactivator IE proteins down-regulate their own transcription, while others facilitate viral mRNA processing or interfere with the presentation of newly synthesized virus antigens. Establishment of latency is closely related to the transcription of a separate category of transcripts, termed latency-associated (LAT). Formation of LATs occurs mainly in nondividing neurons which are metabolically less active and express lower levels of cellular transcription factors (nonpermissive cells). Expression of the stable non-spliced (2 kb), and especially of stable spliced (1.5 and 1.45 kb) LATs is a prerequisite for HSV reactivation. Different HSV genomes (from various HSV strains) do not undergo IE transcription at the same rate. Restricted IE transcription and the absence of viral DNA synthesis favors LAT formation and persistence of the silenced genome. Uneven levels of LAT expression and differences in the metabolic state of carrier neurons influence the reactivation competence. Under artificial or natural activation conditions, sufficient amounts of IE transactivator proteins and proteins promoting nucleoside metabolism are synthesized even in the absence of the viral alpha-TIF facilitating reactivation.