The precursor of the 55K adenovirus terminal protein is an 87K protein that is covalently linked to viral DNA. This protein is likely to be identical to the 80,000 dalton protein described by Challberg et al. (1980). The mRNA for the 87K terminal protein precursor, like that for the E2-72K DNA binding protein, is detectable at both early and late times of infection, and its production is sensitive to protein synthesis inhibition (Lewis and Mathews 1980). The 87K protein, together with proteins of 105,000 and 75,000 daltons, are translated from leftward transcribed (1-strand) messenger RNAs that are complementary to the viral genome between positions 11.2 and 31.5. Additional hybridization to the region between coordinates 37.3 and 41 suggests that the RNA body is spliced to sequences mapping farther right in the genome. Electron microscopic heteroduplex analysis has revealed a family of 1-strand RNAs that probably encode these proteins. The RNA bodies extend from coordinates 30, 26 and 23 to 11.1, with leaders at 39, 68.5 and 75 map units, defining a new adenovirus early region. These RNAs and region E2 RNAs share the first leader and presumably the same promoter, and may be coordinately expressed. Virions of the protease-deficient adenovirus 2 mutant ts1 grown at the restrictive temperature contain only the 87K form; when grown at the permissive temperature they contain both the 87K and 55K forms, and an additional 62K form; wild-type virions contain only the 55K form. Peptide analysis shows all these proteins to be related. The DNA-protein complex containing the 87K form is active as a template for viral DNA replication in vitro. This data supports a model of adenovirus DNA replication in which the 87K terminal protein precursor is the primary translation product and primes DNA synthesis. The 87K precursor is processed during virus maturation to the 55K terminal protein, possibly via a 62K intermediate form, by the virus-specified Ad2ts1 protease. © 1981.