The immediate-early IE-1 gene of Autographa californica nuclear polyhedrosis virus was cloned, and its nucleotide sequence was determined. Sequence analysis indicated that this gene would encode a protein of 582 amino acids with a predicted molecular weight of 66,822. Analysis of IE-1 gene expression during baculovirus infection identified two transcripts. One, 1.9 kilobases (kb), was expressed at constant steady-state levels throughout infection, whereas the other, 2.1 kb, was expressed only early in infection. Analysis of IE-1 cDNA clones demonstrated that the 2.1-kb transcript contained the entire 1.9-kb transcript (exon 1) plus an additional 5' end (exon 0). Genomic Southern analysis placed the exon 0 sequences on the EcoRI B fragment, 4 kilobase pairs upstream of exon 1. Sequencing of the upstream region identified an open reading frame whose 5' end was identical to the exon 0 sequences in the cDNAs. Examination of the genomic DNA sequences around the exon-exon junction revealed sequences similar to published consensus splice acceptor and donor sequences. This is the first example of splicing of any viral transcript during baculovirus infection.