The mechanism controlling the exit from herpes simplex virus latency (HSV) is of central importance to recurrent disease and transmission of infection, yet interactions between host and viral functions that govern this process remain unclear. The cascade of HSV gene transcription is initiated by the multifunctional virion protein VP16, which is expressed late in the viral replication cycle. Currently, it is widely accepted that VP16 transactivating function is not involved in the exit from latency. Utilizing the mouse ocular model of HSV pathogenesis together with genetically engineered viral mutants and assays to quantify latency and the exit from latency at the single neuron level, we show that in vivo (i) the VP16 promoter confers distinct regulation critical for viral replication in the trigeminal ganglion (TG) during the acute phase of infection and (ii) the transactivation function of VP16 (VP16TF) is uniquely required for the exit from latency. TG neurons latently infected with the VP16TF mutant in1814 do not express detectable viral proteins following stress, whereas viruses with mutations in the other major viral transcription regulators ICP0 and ICP4 do exit the latent state. Analysis of a VP16 promoter/reporter mutant in the background of in1814 demonstrates that the VP16 promoter is activated in latently infected neurons following stress in the absence of other viral proteins. These findings support the novel hypothesis that de novo expression of VP16 regulates entry into the lytic program in neurons at all phases of the viral life cycle. HSV reactivation from latency conforms to a model in which stochastic derepression of the VP16 promoter and expression of VP16 initiates entry into the lytic cycle.