Temperature-sensitive mutants of vesicular stomatitis virus (VSV) belonging to complementation group III contain a lesion in the matrix (M) protein. This results in a 2--5 fold increase in transcription at the nonpermissive temperature. Co-infection of cells with one of these mutants and wild-type virus reverses this mutant phenotype. Separation of the transcriptional and translational products from mutant-infected cells reveals an overall increase in each of the viral mRNA species concomitant with degradation of the M protein at the nonpermissive temperature. The increase in mRNA, however, does not lead to increased synthesis of viral proteins. Quantitation of individual mRNA species indicates that M protein acts as a direct inhibitor of transcription as well as an attenuator of sequential transcription.