The functions of the human cytomegalovirus (HCMV) IE86 protein are paradoxical, as it can both activate and repress viral gene expression through interaction with the promoter region. Although the mechanism for these functions is not clearly defined, it appears that a combination of direct DNA binding and protein-protein interactions is involved. Multiple sequence alignment of several HCMV IE86 homologs reveals that the amino acids (534)LPIYE(538) are conserved between all primate and nonprimate CMVs. In the context of a bacterial artificial chromosome (BAC), mutation of both P535 and Y537 to alanines (P535A/Y537A) results in a nonviable BAC. The defective HCMV BAC does not undergo DNA replication, although the P535A/Y537A mutant IE86 protein appears to be stably expressed. The P535A/Y537A mutant IE86 protein is able to negatively autoregulate transcription from the major immediate-early (MIE) promoter and was recruited to the MIE promoter in a chromatin immunoprecipitation (ChIP) assay. However, the P535A/Y537A mutant IE86 protein was unable to transactivate early viral genes and was not recruited to the early viral UL4 and UL112 promoters in a ChIP assay. From these data, we conclude that the transactivation and repressive functions of the HCMV IE86 protein can be separated and must occur through independent mechanisms.