Human T-cell leukemia virus (HTLV) types I and II are unusual among replication-competent retroviruses in that they contain a fourth gene (chi) necessary for replication. The chi gene product, p chi, transcriptionally transactivates the viral long repeat (LTR), and is thus a positive regulator. To investigate p chi transactivation, sequences from the U3 regions of the LTRs of HTLV-I and -II were inserted into the Moloney murine leukemia virus (M-MuLV) LTR by recombinant DNA techniques. Transient expression assays of the chimeric LTRs indicated that the HTLV sequences conferred to the M-MuLV LTR responsiveness to HTLV p chi protein. M-MuLV enhancers were not required for function of the chimeric LTRs. Infectious recombinant M-MuLVs containing chimeric LTRs were also generated. These viruses showed higher infectivity when assayed in mouse cells expressing HTLV-II p chi protein compared to normal mouse cells. Thus the HTLV sequences were able to confer p chi responsiveness to infectious M-MuLV. The generation of a virus dependent on a transactivating protein for its replication has implications for the evolution of the human T-cell leukemia viruses.