A transcription unit at the herpes simplex virus (HSV) type 2 transforming region, mtr-2 (map coordinates 0.580-0.625), comprises two early, unspliced mRNAs of 4.5 kb and 1.2 kb which are 3' co-terminal; a region including that specifying the 1.2-kb mRNA has been sequenced. The putative translated portions of these two mRNAs do not overlap and this feature, together with the arrangement of the mRNAs, is similar to the apparently equivalent co-linear HSV-1 locus which however does not transform. A putative stem and loops structure containing a TATA box is located upstream from the 5' terminus of the 1.2-kb mRNA within the translated portion of the 4.5-kb mRNA. Evidence for the generation of this structure by intra-strand reassociation under our hybridisation conditions has been obtained and possibilities are that it may function as a transcription-activated promoter or as an RNA polymerase pause site. A comparison of the equivalent HSV-2 and HSV-1 regions reveals a conserved sequence downstream from the 3' co-terminus which is present at a similar location in many eukaryotic genes (consensus sequence YGTGTTYY). The overall sequence conservation at this transcription unit is high except for regions located at: (1) the untranslated leaders of the 1.2-kb mRNAs; (2) the N termini of the polypeptides specified by the HSV-2/HSV-1 1.2-kb mRNAs; (3) the intergenic region beyond the 3' co termini. Regions (2) and (3) are located within a transforming fragment of HSV-2. The possible significance of these data for HSV-mediated cell transformation is discussed.