During simian virus 40 lytic infection there is a shift in initiation sites used to transcribe the early region, which encodes large T and small t antigens. Early in infection, transcription is initiated almost exclusively from sites that are downstream of the origin of DNA replication, whereas transcripts produced later are initiated mainly from sites on the upstream side. We have used mutant virus and specially constructed plasmid DNAs to investigate the factors regulating this transcriptional shift. In our studies simian virus 40 large T antigen appears to mediate the shift in transcription in two ways: first, T antigen represses transcription at the downstream sites late in infection by binding to the region where these RNAs are initiated; second, T antigen promotes transcription from sites on the upstream side by its ability to initiate replication or amplification, or both, of the template DNA. In addition, transcription from the downstream sites is heavily dependent on enhancer sequences located in the 72-base-pair repeat region, whereas transcription from the upstream sites late in infection does not require enhancer sequences. Thus, different overlapping promoters regulate simian virus 40 early-region expression in a manner that apparently coordinates the production of large T antigen with the increase in viral DNA.