The pattern of expression of the caprine arthritis encephalitis virus genome (CAEV) in acutely infected tahr lung cells was found to be complex and temporally regulated. Employing Northern analysis, five CAEV-specific transcripts, 9, 6.5, 5.0, 2.5, and 1.4 kb, were detected. Nucleotide sequence analysis established the genetic structure of two species of cDNA, isolated from a library of CAEV-infected tahr cells, and suggested that they represent rev-like transcripts. One of these cDNA species was composed of three exons--the leader, an exon derived from the 5' region of env, and an exon which spanned the 3' orf. The second cDNA species consisted of four exons--three of which were identical with those of the former species. The additional exon (the second) was located at the 3' end of pol. These transcripts could potentially encode three proteins--a Rev-like protein, which is a fusion of 38 amino acids derived from the N-terminus of env and 91 residues from the 3' orf; a truncated form of the env transmembrane protein, and a novel protein, designated X composed of 73 amino acids. Thus, CAEV, like other lentiviruses, displays a complex pattern of gene expression, characterized by alternative splicing and the production of potentially polycistronic transcripts.