The mechanism of the divergent expression of the varicella-zoster virus (VZV) ORF 28 and ORF 29 genes from a common intergenic DNA element, the ORF 28/29 promoter, is of interest based on the observation that both genes are expressed during VZV lytic infection but only the ORF 29 gene is expressed in latently infected neurons. In the work presented here, expression driven by the ORF 28/29 intergenic region was examined. We found that the promoter activity towards the ORF 29 direction is more responsive to activation by the major viral transactivator IE62 than that towards the ORF 28 direction in the context of our experimental system. Analysis of the functional DNA elements involved in IE62 activation of the bidirectional ORF 28/29 regulatory element revealed that in both transfected and VZV-superinfected cells it is a fusion of two unidirectional promoters overlapping an essential USF binding site but with distinct TATA elements. A single TATA element directs expression in the ORF 28 direction, whereas the two TATA elements directing ORF 29 gene expression are alternatively and differentially utilized for transcription initiation. We also identified an Sp1 site localized proximal to the ORF 28 gene which functions as an activator element for expression in both directions. These results indicate that the ORF 28 and ORF 29 genes can be expressed either coordinately or independently and that the observed expression of only the ORF 29 gene during VZV latency may involve neuron-specific cellular factors and/or structural aspects of the latent viral genome.Varicella-zoster virus (VZV) is the causative agent of two human diseases: varicella (chickenpox) and zoster (shingles). Primary infection gives rise to varicella with characteristic skin lesions resulting from lytic infection of the virus in cutaneous epithelial cells. As a member of the neurotropic alphaherpesvirus subfamily, VZV can establish latency in the dorsal root ganglia following primary infection (4). Latent VZV DNA is predominantly localized in the neurons, although some researchers also identified viral sequences in nonneuronal satellite cells (14,22,23,32,37). Data obtained from human ganglia and animal models indicate that during latent infection, a small subset of lytic viral genes is expressed while most of the VZV genome is transcriptionally quiescent. These latency-expressed genes include open reading frames (ORFs) 63, 62, 29, 21, 4, and 66 (2, 7, 8, 11, 12, 20, 24, 33, 35, 66). In the majority of studies conducted, expression of these genes has been detected at the level of RNA. However, expression of all of these genes at the protein level has also been reported (8,12,33,35,66), raising the possibility of a role for one or more of them as trans-acting factors during latency. While the majority of the expressed proteins detected appear to be cytoplasmic rather than nuclear, the possibility of the presence of protein below the levels of detection in the nuclei or a rapid shuttling between the nucleus and cytoplasm cannot be discounted. Because s...