The 5'-terminal 100-200 ribonucleotides of late simian virus 40 (SV40) mRNAs are not transcribed immediately adjacent to their coding sequences. This conclusion is based on the following observations. The major late SV40 cytoplasmic RNA species, 16S and 19S, were purified from poly(A)-containing cytoplasmic RNA by hybridization to and elution from an SV40 DNA fragment that maps between 0.67 and 0.76. This fragment is remote from the DNA fragments that include the coding sequences. The RNA transcripts from the fragment located between 0.67 and 0.76 were found in abundance. Even though selected on oligo(dT)-cellulose columns, the 5'-terminal sequences did not contain poly(A) tails directly adjacent to their 3' termini. The 5' terminus of the 16S mRNA, as monitored by hybridization of the sequences adjacent to the "cap" structure, was found adjacent to the coding sequences when intact [3H]methyl-labeled RNA was hybridized with restriction fragments. However, after fragmentation, the methyl label of this same RNA hybridized with a fragment that is remote from the coding sequences and maps between 0.67 and 0.73. These results imply a novel mechanism for biosynthesis of SV40 mRNA.