We have identified a trans-dominant mutant form of the herpes simplex virus (HSV) DNA-binding protein ICP8 which inhibits viral replication. When expressed by the V2.6 cell line, the mutant gene product inhibited wild-type HSV production by 50- to 150-fold when the multiplicity of infection was less than 5. Production of HSV types 1 and 2 but not production of pseudorabies virus was inhibited in V2.6 cells. The inhibitory effect was not due solely to the high levels of expression, because the levels of expression were comparable to those in the permissive wild-type ICP8-expressing S-2 cell line. Experiments designed to define the block in viral production in V2.6 cells demonstrated (i) that viral alpha and beta gene expression was comparable in the different cell lines, (ii) that viral DNA replication proceeded but was reduced to approximately 20% of the control cell level, and (iii) that late gene expression was similar to that in cells in which viral DNA replication was completely blocked. Genetic experiments indicated that the mutant gene product inhibits normal functions of ICP8. Thus, ICP8 may play distinct roles in replication of viral DNA and in stimulation of late gene expression. The dual roles of ICP8 in these two processes could provide a mechanism for controlling the transition from viral DNA synthesis to late gene expression during the viral growth cycle.