Transactivator proteins of the bovine leukemia (BLV) and human T-lymphotropic (HTLV) viruses increase long terminal repeat (LTR)-directed viral gene expression and act as immortalizing oncogenes in tissue culture. We report here that the BLV tax gene sequence contains an enhancer-like activity. The X long open reading frame was cloned up-stream of the beta-globin promoter linked to the chloramphenicol acetyltransferase (CAT) gene. In the presence of tax sequences, up to sevenfold enhancement of CAT expression was observed. A computer-assisted homology search revealed the presence of a consensus enhancer core sequence (GTGTTGTTGGTTG) into the third exon of the 2.1-kb X mRNA. These studies demonstrate that the tax gene contains a transcriptional enhancer which could be involved in early viral gene expression in vivo.