Molecular chimeras with the p21 transforming gene of Harvey murine sarcoma virus linked to DNA containing the long terminal repeat (LTR) or mouse mammary tumor virus (MMTV) have been constructed. Transformants of NIH 3T3 cells induced by transfection with MMTV LTR-p21 hybrid DNA have been identified that express the normal p21 gene product. The levels of p21 RNA and protein in these transformants are regulated by physiological concentrations of dexamethasone, a synthetic glucocorticoid hormone. Hybrid transcripts containing p21 gene sequences originate at the normal MMTV viral initiation site. It is concluded that sequences necessary for hormonal control of transcription are completely specified by the viral genome and probably map within the viral LTR.