The purpose of this study was to gain insights into the regulation of Epstein-Barr virus (EBV) gene transcription during the establishment of viral latency in B cells. During the early stages of EBV infection in B lymphocytes, transcription of six viral nuclear antigens (EBNAs) is initiated from an early promoter (Wp). This is followed by a switch of promoter usage to an upstream promoter, Cp, whose activity is autoregulated by both EBNA1 and EBNA2. Previously it was demonstrated that infection of primary B cells with EBNA2-negative (EBNA2-) EBNA4-mutant (EBNA4mut) virus resulted only in the expression of mutant EBNA4 protein and failure to express the other EBNA gene products (C. Rooney H. G. Howe, S. H. Speck, and G. Miller, J. Virol. 63:1531-1539, 1989). We extended this research to demonstrate that Wp-to-Cp switching did not occur upon infection of primary B cells with an EBNA2- EBNA4mut virus (M. Woisetschlaeger, X. W. Jin, C. N. Yandara, L. A. Furmanski, J. L. Strominger, and S. H. Speck, Proc. Natl. Acad. Sci. USA 88:3942-3946, 1991). Further characterization of this phenomenon led to the identification of an EBNA2-dependent enhancer upstream of Cp. On the basis of these data, a model was proposed in which initial transcription from Wp gives rise to the expression of EBNA2 and EBNA4, and then transcription is upregulated from Cp via the EBNA2- dependent enhancer (Woisetschlaeger et al., as noted above). Implicit in this model is that transcription of the EBNA1 and EBNA3a to -3c genes is dependent on the switch from Wp to Cp, since primary cells infected with EBNA2- EBNA4mut virus fail to switch and also fail to express these viral antigens. Here we critically evaluate this model and demonstrate, in contrast to the predictions of the model, that transcription of both the EBNA1 and EBNA2 genes precedes activation of Cp. Furthermore, the level of EBNA1 gene transcription was strongly reduced in primary B cells infected with EBNA2- EBNA4mut virus compared with that of cells infected with wild-type virus. Switching to Cp, as well as EBNA1 gene transcription, was observed upon infection of EBV-negative Burkitt's lymphoma (BL) cell lines with EBNA2- EBNA4mut virus, thus establishing a correlation between early EBNA1 gene transcription and upregulation of transcription initiation from Cp. However, in EBV-negative BL cell lines infected with EBNA2- EBNA4mut virus, transcription of the EBNA1 gene at early time points postinfection initiated from Qp, the EBNA1 gene promoter active in group I BL cells (B. C. Schaefer, J. L. Strominger, and S. H. Speck, Proc. Natl. Acad. Sci. USA 92:10565-10569, 1995), rather than from Wp. The data support a model in which EBNA1 plays an important role in the cascade of events leading to successful switching from Wp to Cp and subsequent immortalization of the infected B cell.