Nidoviruses produce an extensive 3'-coterminal nested set of subgenomic (sg) mRNAs, which are used to express structural proteins and sometimes accessory proteins. In arteriviruses and coronaviruses, these mRNAs contain a common 5' leader sequence, derived from the genomic 5' end. The joining of the leader sequence to different segments derived from the 3'-proximal part of the genome (mRNA bodies) presumably involves a unique mechanism of discontinuous minus-strand RNA synthesis in which base pairing between sense and antisense transcription-regulating sequences (TRSs) plays an essential role. The leader TRS is present in the loop of a hairpin structure that functions in sg mRNA synthesis. In this study, the minimal sequences in the 5'-proximal region of the Equine arteritis virus genome that are required for sg RNA synthesis were delimited through mutagenesis. A full-length cDNA clone was engineered in which this domain was duplicated, allowing us to make mutations and monitor their effects on sg RNA synthesis without seriously affecting genome replication and translation. The leader TRS present in the duplicated sequence was used and yielded novel sg mRNAs with significantly extended leaders. Our combined findings suggest that the leader TRS hairpin (LTH) and its immediate flanking sequences are essential for efficient sg RNA synthesis and form an independent functional entity that could be moved 300 nucleotides downstream of its original position in the genome. We hypothesize that a conformational switch in the LTH region regulates the role of the 5'-proximal region of the arterivirus genome in subgenomic RNA synthesis.