Moloney murine leukaemia virus (M-MuLV) infection of embryonal carcinoma (EC) cells results in the integration of proviral DNA into the host cell genome, but not in virus production. One suggested explanation for the lack of viral gene expression in EC cells has been methylation of the integrated viral DNA. However, subsequent reports indicated that integration of the M-MuLV DNA occurs soon after infection, but that viral DNA methylation occurs considerably later. Nevertheless, viral gene expression is not observed even at early times. One possible explanation is that certain M-MuLV regulatory sequences do not function in EC cells. We now present evidence which supports this hypothesis.