Retroviral long terminal repeats (LTRs) contain elements responsible for the control of proviral transcription and gene expression. Molecular clones of the LTR region of a number of avian retroviruses have been isolated, and DNA sequence analysis of these clones reveals the existence of a related, but heterogeneous, family of LTRs. To examine the functional significance of the observed sequence differences, we have directly tested the abilities of several different avian retrovirus LTRs to act as promoters and enhancers of mRNA transcription. Our results indicate that large differences in LTR transcriptional activity exist and that these differences in gene expression directly correlate with LTR enhancer activity. In particular, we show that the LTR of Fujinami sarcoma virus is intermediate in both transcriptional and enhancer activity when compared with the very active LTRs of the exogenous viruses RAV-2 and Schmidt-Ruppin B and the much less active LTRs of the endogenous virus RAV-0 and its provirus ev-2. These results suggest that LTR enhancer activity may be the primary determinant of avian retroviral LTR transcriptional activity and, hence, oncogenic potential.