When Vero or murine cells were stably transfected with the human immunodeficiency virus (HIV) long terminal repeat (LTR) that directs the chloramphenicol acetyltransferase (CAT) gene (pU3R-III-CAT), expression was suppressed. Treatment with the nucleoside analog 5-azacytidine (5-azaC) restored CAT expression. S1 nuclease analysis and a nuclear run-on assay demonstrated that activation of the latent HIV LTR by 5-azacytidine occurred at the transcriptional level. Southern blot analysis demonstrated that this activation was due to the demethylation of cytosine residues in the LTR enhancer. Thus, the HIV LTR appears to be susceptible to transcriptional inactivation by methylation, a process that is proposed to play a modulatory role in viral latency.