Regulation of orf73 (LANA) gene expression is critical to the establishment and maintenance of latency following infection by members of the gamma-2 herpesvirus (rhadinovirus) family. Previous studies of murine gammaherpesvirus 68 (gammaHV68) have demonstrated that loss of LANA function results in a complete failure to establish virus latency in the spleens of laboratory mice. Here we report the characterization of alternatively spliced LANA and v-cyclin (orf72) transcripts encoded by gammaHV68. Similar to other rhadinoviruses, alternative splicing, coupled with alternative 3' processing, of a ca. 16-kb transcriptional unit can lead to expression of either LANA or v-cyclin during gammaHV68 infection. Spliced LANA and v-cyclin transcripts were initially identified from an analysis of the gammaHV68 latently infected B-cell lymphoma cell line S11E, but were also detected during lytic infection of NIH 3T12 fibroblasts. 5' Random amplification of cDNA ends (RACE) analyses identified two distinct promoters, p1 and p2, that drive expression of spliced LANA transcripts. Analysis of p1 and p2, using transiently transfected reporter constructs, mapped the minimal sequences required for promoter activity and demonstrated that both promoters are active in the absence of any viral antigens. Analysis of spliced LANA and v-cyclin transcripts in spleens recovered from latently infected mice at days 16 and 42 postinfection revealed that spliced v-cyclin transcripts can only be detected sporadically, suggesting that these may be associated with cells reactivating from latency. In contrast, spliced LANA transcripts were detected in ca. 1 in 4,000 splenocytes harvested at day 16 postinfection. Notably, based on the frequency of viral genome-positive splenocytes at day 16 postinfection (ca. 1 in 200), only 5 to 10% of viral genome-positive splenocytes express LANA. The failure of the majority of infected splenocytes at day 16 postinfection to express LANA may contribute to the contraction in the frequency of latently infected splenocytes as chronic infection is established, due to failure to maintain the viral episome in proliferating B cells.