Reovirus protein lambda 3 has been isolated from cells infected with two recombinant vaccinia viruses into the TK gene of which the reovirus serotype3 strain Dearing L1 genome segment under the control of the bacteriophage T7 RNA polymerase promoter, or the T7 polymerase gene itself, had been cloned. Highly purified protein lambda 3 does not transcribe double-stranded reovirus RNA into single-stranded RNA, or plus-stranded reovirus RNA into minus-stranded RNA, but it does transcribe poly(C) into poly(G). It prefers Mn2+ to Mg2+. A polymer consisting of poly(C) linked linearly to poly(U) provided template activity only for its poly(C) moiety. Protein lambda 3 forms complexes with protein lambda 1, as well as with protein lambda 2, and with both lambda 1 and lambda 2, which are sufficiently stable to be precipitated by monospecific antisera. None of these complexes are capable of transcribing either ds- or ssRNA.