The NS1 protein (139 amino acids) is one of the two nonstructural proteins of human respiratory syncytial virus (RSV) and is encoded by a very abundant mRNA transcribed from the promoter-proximal RSV gene. The function of NS1 was unknown and was investigated here by using a reconstituted transcription and RNA replication system that involves a minireplicon and viral proteins (N, P, L and M2-1) expressed from separate cotransfected plasmids. Coexpression of the NS1 cDNA strongly inhibited transcription and RNA replication mediated by the RSV polymerase, even when the level of expressed NS1 protein was substantially below that observed in RSV-infected cells. The effect depended on synthesis of NS1 protein rather than NS1 RNA alone. Transcription and both steps of RNA replication, namely, synthesis of the antigenome and the genome, appeared to be equally sensitive to inhibition. The efficiency of encapsidation of the plasmid-derived minigenome was not altered by coexpression of NS1, indicating that the inhibition occurs at a later step. In two different dicistronic minigenomes, transcription of each gene was equally sensitive to inhibition by NS1. This suggested that the gradient of transcriptional polarity was unaffected and that the effect of NS1 instead probably involves an early event such as polymerase entry on the genome. NS1-mediated inhibition of transcription and RNA replication was not affected by coexpression of the M2 mRNA, which has two open reading frames encoding the transcriptional elongation factor M2-1 and the putative negative regulatory factor M2-2. The potent nature of the NS1-mediated inhibition suggests that negative regulation is an authentic function of the NS1 protein, albeit not necessarily the only one.