A bovine papillomavirus (BPV) type 1-encoded function (M) which is a negative regulator of viral plasmid replication has been described elsewhere (Berg et al. Cell, in press; Roberts and Weintraub, Cell, in press). We report here that expression of M, which is a repressor of transient BPV replication and is not required as a positive factor in these assays, is required for the establishment of the viral genome as a stable nuclear plasmid. This function is encoded in part by the 5' portion of the BPV E1 open reading frame, whereas the 3' part of this open reading frame encodes a positive replication function (R). The R function is required for early replication events. We used transient replication assays to define the phenotypes of mutants in both the R and M genes and complementation tests to show that R and M define two separate genes. We showed that R- and M- mutants could also complement each other in stable assays. In cotransfection experiments, M- mutants had a lethal effect on the growth of G418-resistant colonies, and in addition their morphological transformation efficiencies were reduced. The rare colonies which did appear contained the mutant DNA integrated into the cellular genome. R- mutants transformed with wild-type efficiency, and the mutant DNA was also found integrated. When cotransfected, R- and M- mutants could each be established as unrearranged plasmids.