A regulated switch between latent and lytic gene expression is common to all known herpesviruses. However, the effects on host colonization of altering this switch are largely unknown. We deregulated the transcription of the gene encoding the major lytic transactivator of murine gammaherpesvirus-68, ORF50, by inserting a new and powerful promoter element in its 5' untranslated region. In vitro, the mutant virus (M50) transcribed ORF50 at a high level and showed more rapid lytic spread in permissive fibroblast cultures, but in vivo, the M50 virus showed a severe deficit in latency establishment, with no sign of the infectious mononucleosis-like illness normally associated with wild-type infection. Although a low level of M50 viral DNA was detectable by PCR in spleens, replication-competent virus could not be recovered beyond 10 days post-infection. The M50 virus was also attenuated in immunocompromised mice. Thus a gammaherpesvirus unable to shut off lytic cycle gene expression showed severely restricted host colonization.