To elucidate the mechanism(s) of influenza viral RNA replication, we have developed an in vitro system in which the templates for viral RNA replication as well as the viral messenger RNAs (mRNAs) are synthesized. Because the synthesis of both the viral mRNAs and the template RNAs occurs in the nucleus of infected cells, we determined whether infected cell nuclei are active in the synthesis of these two types of transcripts in vitro. Nuclei isolated as early as 1-2 hr after infection catalyze the in vitro synthesis of both the viral mRNAs and template RNAs. The time course of appearance of these activities indicates that they most likely represent the transcriptional complexes functioning in vivo. Template RNA synthesis catalyzed by the nuclei in vitro is independent of concomitant protein synthesis; rather, it utilizes preformed proteins present in the nuclear preparations. This protein pool can be depleted by treating the infected cells with a protein synthesis inhibitor prior to the isolation of the nuclei, thereby rendering the nuclei inactive in template RNA synthesis in vitro. This activity can be restored by the addition of infected cell cytoplasmic extracts or of the high-speed supernatant fraction from these extracts. These results indicate that the cytoplasmic fraction from infected cells enables the viral transcription complex to continue transcription past the site at which termination occurs during viral mRNA synthesis and also suggest that this fraction enables the transcription complex to initiate transcription without the capped primer used in viral mRNA synthesis.