Herpesvirus saimiri strains can be divided into at least three subgroups (A, B, C) based on sequence divergence at the left end of viral unique sequence DNA. Strains of subgroups A and C are highly oncogenic and readily transform simian T-lymphocytes in vitro to interleukin-2 independent growth, while subgroup B strains do not. A left terminal reading frame of a H. saimiri subgroup A strain was shown previously to correlate with the oncogenic phenotype and in vitro transforming potential; the deduced polypeptide was termed STP-A. Furthermore, this same region contains an open reading frame (ORF) for dihydrofolate reductase (DHFR) and genes for five virus-specific U RNAs (HSURs). We now show by sequence analysis of the corresponding region in a subgroup C strain that DHFR and HSUR genes are present in both virus subgroups; however, no sequence homologous to the STP-A reading frame was found in this subgroup C virus. At a position and orientation similar to STP-A, two ORFs were found for peptides sharing a putative transmembrane domain. One of them encodes a peptide with collagen-like repetitions. In addition to the lack of similarity to STP-A, these two reading frames also did not show any similarity to known oncogenes. The organization of sequences at the left junction of unique L- and repetitive H-DNA of H. saimiri suggests frequent recombinational events, possibly accelerating the uptake of foreign genes by the virus.