Starting from a biologically active recombinant DNA clone of exogenous unintegrated GR mouse mammary tumor virus, we have generated three subclones of PstI fragments of 1.45, 1.1, and 2.0 kb in the plasmid vector PBR322. The nucleotide sequence has been determined for the clone of 1.45 kb which includes almost the complete region of the long terminal repeat (LTR) plus an adjacent stretch of unique sequence DNA. A short region of the 2.0 kb clone, containing the beginning of the LTR, has also been sequenced. Starting with the A of an initiation codon outside the LTR, we detected an open reading frame of 960 nucleotides, potentially coding for a protein of 320 amino acids (36K). Two hundred nucleotides downstream from the termination codon, and approximately 25 nucleotides upstream from the presumptive initiation site of viral RNA synthesis, we found a promoter-like sequence. The sequence AGTAAA was detected approximately 15-20 nucleotides upstream from the 3' end of virion RNA and probably serves as a polyadenylation signal. The 1.45 kb PstI fragment has been transfected into Ltk- cells together with a plasmid containing the thymidine kinase gene of herpes simplex virus. The virus-specific RNA synthesis detected in a Tk+ cell clone was strongly stimulated by the addition of dexamethasone.