Stereotactic inoculation of a herpes simplex virus (HSV) gene transfer vector into the hippocampus and caudate of rat brain resulted in limited and transient viral replication and the establishment of latency. Virus attenuation was achieved by insertional inactivation of a viral gene, Us3. Insertion of a lacZ reporter gene, under the control of the HSV glycoprotein C (gC) late gene promoter, allowed viral replication to be monitored in vivo. Unlike unattenuated virus, the Us3::pgC-lacZ recombinant caused little apparent damage to normal hippocampal morphology. Transient lacZ expression was detected in a considerable population of neurons of the dentate gyrus following hippocampal injection, whereas few positively staining neurons were present within the caudate after injection at that site. Latency-associated transcripts, the hallmark of latent infection, were detected in the brain 10 months after injection. This recombinant virus may be useful as a gene transfer vector for long-term expression of foreign genes in the central nervous system.