COS cells transfected with plasmids that activate DAI depend on expression of virus-associated I (VAI) RNA to prevent the inhibitory effects of the alpha subunit of eukaryotic initiation factor 2 (eIF-2 alpha) kinase (DAI) and restore the translation of vector-derived dihydrofolate reductase mRNA. This VAI RNA requirement could be completely replaced by reovirus polypeptide sigma 3, consistent with its double-stranded RNA (dsRNA)-binding activity. S4 gene transfection of 293 cells also partially restored adenovirus protein synthesis after infection with the VAI-negative dl331 mutant. In dl331-infected 293 cells, eIF-2 alpha was present mainly in the acidic, phosphorylated form, and trans complementation with polypeptide sigma 3 or VAI RNA decreased the proportion of eIF-2 alpha (P) from approximately 85 to approximately 30%. Activation of DAI by addition of dsRNA to extracts of S4 DNA-transfected COS cells required 10-fold-higher levels of dsRNA than extracts made from cells that were not producing polypeptide sigma 3. In extracts of reovirus-infected mouse L cells, the concentration of dsRNA needed to activate DAI was dependent on the viral serotype used for the infection. Although the proportion of eIF-2 alpha (P) was greater than that in uninfected cells, most of the factor remained in the unphosphorylated form, even at 16 h after infection, consistent with the partial inhibition of host protein synthesis observed with all three viral serotypes. The results indicate that reovirus polypeptide sigma 3 participates in the regulation of protein synthesis by modulating DAI and eIF-2 alpha phosphorylation.