The regulatory elements present in the long terminal repeat (LTR) of avian sarcoma virus DNA were analyzed by recombinant DNA techniques coupled with DNA-mediated gene transfer in avian as well as mammalian cells. For this purpose, the neomycin resistance gene from transposon Tn5 was inserted downstream from the avian sarcoma virus LTR, and the recombinant plasmid DNA was introduced into cells by the calcium phosphate technique. Cells resistant to the drug G-418 were selected. Analysis of the RNA transcripts made in vivo in these transformants indicated that initiation and termination of the transcripts occurred in the LTR sequences. Deletions were then introduced into the LTR, and their effect on transcription was also studied. These results allowed us to identify a strong regulatory sequence between nucleotides -299 and -114 in the LTR of avian sarcoma virus.