Varicella-zoster virus is the etiological agent of chickenpox and zoster in humans and belongs to the Alphaherpesvirinae subfamily within the family Herpesviridae. Much of the current understanding of gene regulation in alphaherpesviruses has been derived from studies of the prototype herpes simplex virus (HSV). In HSV, two virus-encoded, trans-regulatory proteins, ICP4 and ICP27, are essential for the replicative cycle of the virus. ICP4 is important in modulating HSV genes of all three kinetic classes, whereas the trans-regulatory effects of ICP27 are primarily associated with the expression of late genes. Recent evidence indicates that the trans-regulatory effects of ICP27 involve posttranscriptional processing of target gene transcripts (R. M. Sandri-Golding and G. E. Mendoza, Genes Dev. 6:848-863, 1992). The ICP27 homolog in varicella-zoster virus is a 452-amino-acid polypeptide encoded by the open reading frame 4 (ORF4) gene. Contrary to what is found with ICP27, we show that the ORF4 polypeptide is a transcriptional activator of diverse target promoters and has a critical requirement for the presence of upstream elements within these promoters to mediate its transcriptional effects. Evidence is also presented to implicate a critical role for the cysteine-rich, C-terminal region of the ORF4 polypeptide in its trans-regulatory functions. Specifically, by oligonucleotide-directed site-specific mutagenesis, we demonstrate that of 10 cysteine residues in the ORF4 polypeptide, only C-421 and C-426 are essential for transactivator function and suggest that these cysteine residues may participate in critical protein-protein interactions rather than protein-nucleic acid interactions to mediate ORF4 inducibility.