Indirect immunofluorescence shows that purified T7 RNA polymerase, when microinjected into monkey kidney (Vero) cells, localizes predominantly in the cytoplasm. To direct active T7 RNA polymerase to the nucleus, we first created unique restriction sites at two locations within the cloned gene for T7 RNA polymerase, T7 gene 1 and then inserted into these sites a 36-bp synthetic nucleotide sequence encoding the SV40 T antigen nuclear location signal. Insertion of the nuclear location signal between codons 10 and 11 of T7 RNA polymerase has only minimal effect on transcription activity in Escherichia coli, but its insertion four codons from the C terminus abolishes activity. Fusion proteins having only foreign codons ahead of codon 11 also have transcription activity in E. coli. Such fusion proteins can be expressed transiently from plasmids microinjected into monkey cells, using SV40 expression signals, and detected by immunofluorescence. A fusion protein containing a nuclear location signal localized predominantly in the nucleus whereas those which lack the signal localize predominantly in the cytoplasm. Ability to direct T7 RNA polymerase to the nucleus may be an advantage in attempting to make this enzyme useful for selective transcription in eukaryotic cells.