Bovine herpes virus 1 (BHV-1) establishes latency in sensory neurons of trigeminal ganglia (TG), and germinal centers of pharyngeal tonsil. Periodically BHV-1 reactivates from latency, virus is shed, and consequently virus transmission occurs. Two transcripts, the latency related (LR) RNA and ORF-E, are abundantly expressed in TG of latently infected cattle. A LR mutant strain of BHV-1 was constructed that contains stop codons near the beginning of the LR-RNA. The LR mutant virus does not express two proteins encoded by the LR gene, or reactivate from latency suggesting that LR protein expression regulates the latency-reactivation cycle. Higher levels of apoptosis occur in TG of calves infected with the LR mutant versus wild type BHV-1 indicating that the anti-apoptotic properties of the LR gene regulate the latency-reactivation cycle. The LR gene also inhibits bICP0 expression and mammalian cell growth, but these functions do not require LR protein expression. In contrast, the ability of the LR gene to inhibit apoptosis appears to require LR protein expression. A small open reading frame (ORF-E) that is located within the LR promoter is expressed in the nucleus of neuroblastoma cells. We predict that the LR gene and ORF-E regulate the BHV-1 latency-reactivation cycle.