The 5S ribosomal RNA gene of Xenopus contains a region within the gene that directs the initiation of 5S RNA synthesis. This result was obtained by enzymatically deleting a fragment of X. borealis somatic 5S DNA from the 5' side of the gene and cloning the resultant mutants. These deletion mutants were tested for their ability to support 5S RNA transcription in an oocyte nuclear extract. Mutants lacking the entire 5' flanking region synthesized 5S RNA or slightly smaller RNAs that were initiated a few nucleotides into the gene. Mutants deleted as far as 50 nucleotides into the gene synthesized discrete RNAs of 116--121 nucleotides. These RNAs were fused transcripts that were initiated in the plasmid vector, transcribed through the remainder of the 5S RNA gene and terminated at the end of the gene. Mutants deleted 55 or more nucleotides into the gene synthesized little or no 5S size RNA. When additional nucleotides were inserted between nucleotides +40 and +41 of the gene, discrete transcripts of approximately 120 nucleotides were synthesized that had initiated within the gene. We conclude that a control region within the gene directs RNA polymerase III to initiate transcription approximately 50 nucleotides upstream from the 5' border of this region. The 3' border of the control region resides between gene residues +80 and +83 as determined in work described in the accompanying paper (Bogenhagen, Sakonju and Brown, 1980). When this control region is present, the exact site of initiation is determined by the sequence around the start site.