Diseases caused by retroviruses such as AIDS and leukemia have intensified the need to understand the mechanisms of retrovirus replication. Our primary objectives are to understand how reverse transcription of viral mRNA occurs and how the cDNA products are integrated into the genome of infected cells. Owing to their similarity to retroviruses, LTR-retrotransposons are important models for retrovirus replication. The retrotransposon under study in our laboratory is the Tf1 element of the fission yeast Schizosaccharomyces pombe. Work described in this report continues to address questions about mechanisms of reverse transcription and integration. One primary goal was to study the detailed pathway of reverse transcription and identify which residues of RT contribute to forming specific cDNA intermediates. A screen of random mutations in RT was designed to isolate mutants that initiated reverse transcription with high efficiency but were unable to produce an integratable species of full-length double stranded cDNA. The result of this work was the identification of a cluster of amino acids in RT that contributed specifically to the removal of the plus strand primer (PPT) from the 5 end of the cDNA. These residues are conserved in the RNase H domain allowing them to be modeled on an x-ray crystal of HIV-1 RT bound to the PPT. The mutations in the Tf1 RT corresponded to residues in HIV-1 RT that contact the PPT. These results support the model that the mutations in Tf1 RT define a domain with the specific function of processing the PPT from the 5 end of the plus strand cDNA. [unreadable] [unreadable] Another primary goal of this report was to identify the molecular basis of the mechanism that directs integration to regions upstream of ORFs. To study insertion patterns in specific genes, a target plasmid assay was developed. Integration into plasmids containing ade6 and fbp1 occurred upstream of the ORFs at specific positions. Deletion analyses of the plasmids indicated that the target positions were in the promoters and the insertion sites were the only sequences required for directing integration. The prominent insertion sites in fbp1 were just 30 and 40 bp downstream of where the transcription activator Atf1p bound. These data suggested the model that transcription factors bound at their promoters mediate integration. This model was supported by the finding that a functional binding site for the transcription factor Aft1p played a critical role in the targeting of Tf1 integration to the two major insertion sites in the fbp1 promoter. Recent evidence that Atf1p is required for integration in the fbp1 promoter and that Atf1p interacts with integrase provides strong support for the role of Atf1p in directing integration to target sites.