Coronavirus transcription leads to the synthesis of a nested set of mRNAs with a leader sequence derived from the 5' end of the genome. The mRNAs are produced by a discontinuous transcription in which the leader is linked to the mRNA coding sequences. This process is regulated by transcription-regulating sequences (TRSs) preceding each mRNA, including a highly conserved core sequence (CS) with high identity to sequences present in the virus genome and at the 3' end of the leader (TRS-L). The role of TRSs was analyzed by reverse genetics using a full-length infectious coronavirus cDNA and site-directed mutagenesis of the CS. The canonical CS-B was nonessential for the generation of subgenomic mRNAs (sgmRNAs), but its presence led to transcription levels at least 10(3)-fold higher than those in its absence. The data obtained are compatible with a transcription mechanism including three steps: (i) formation of 5'-3' complexes in the genomic RNA, (ii) base-pairing scanning of the nascent negative RNA strand by the TRS-L, and (iii) template switching during synthesis of the negative strand to complete the negative sgRNA. This template switch takes place after copying the CS sequence and was predicted in silico based on high base-pairing score between the nascent negative RNA strand and the TRS-L and minimum DeltaG.