We analyzed the DNA binding properties of wild-type simian virus 40 large T antigen and found that the protein binds cooperatively to three tandem sites at a regulatory region of SV40 DNA. One consequence of this T antigen:DNA interaction is the specific repression of SV40 early RNA synthesis in vitro. We mapped a region of 85 base pairs that is necessary and sufficient to initiate early SV40 transcription in vitro. This promoter region lies directly adjacent to the third T antigen binding site but does not include the "TATA" sequence. To determine how T antigen interacts with its binding sites to repress RNA synthesis, we analyzed transcription directed by a variety of wild-type, mutant and hybrid template DNAs. Our findings suggest that the cooperative binding of T antigen to its sites is directly responsible for inhibiting the initiation, rather than blocking elongation, of early RNA synthesis. A model is presented to explain the role of T antigen binding in the regulation of viral transcription and DNA replication during SV40 lytic infection. © 1981.