5' deletion mutants of the minute virus of mice P38 promoter were constructed and analyzed for transcriptional activity in vitro and in vivo. In uninfected mouse A9 cell extracts, 107 base pairs upstream of the RNA start sites are required for optimal activity. Within this region, the only readily recognizable cis-acting control elements are a GC box and a TATA box. However, in infected cell extracts, deletion of a sequence between -167 and -121, which shares homology with the 30-base-pair trans-activation region (TAR) of H-1 virus (S. L. Rhode and S. M. Richard, J. Virol. 61:2807-2815, 1987), results in a three- to fourfold decrease in transcriptional activity. Interestingly, in vivo transfection experiments demonstrate a three- to eightfold increase in transcription relative to the wild-type promoter when the TAR element homology region is deleted and reveal a functional role for a CCAAT motif which lies immediately downstream of the TAR element. These results indicate both positive and negative regulation of the P38 promoter.