Adenovirus E1a proteins function in transcriptional activation, transcriptional repression, cellular DNA synthesis induction, and cellular transformation. Here we examine the role of the previously undefined E1a region 1, the last of three conserved E1a regions to be characterized. Region 1 is required for transcriptional repression, transformation, and DNA synthesis induction, but not transcriptional activation. These results support our previous suggestion that transcriptional repression is the basis of E1a-mediated transformation. Two conserved regions (regions 1 and 2), present in both early E1a proteins, are essential for transcriptional repression, transformation, and induction of DNA synthesis. In contrast, mutagenesis suggests that transcriptional activation requires only 49 amino acids (region 3) unique to the 289 amino acid E1a protein. This we prove by demonstrating that a 49 amino acid region 3 synthetic peptide efficiently activates an E1a-inducible promoter. This peptide is the smallest known protein fragment functioning as a transcriptional activator.