JC virus causes the human demyelinating disease progressive multifocal leukoencephalopathy by selective infection of glial cells. This cell specificity results from glial-specific expression of viral early genes (large and small T antigens). Analysis of transcriptional regulation by the MH1 JC virus early promoter demonstrates that glial specificity is directed by the basal promoter. Because T antigen regulates the basal region of several viral and cellular promoters, we investigated whether it controls the JC virus basal promoter in a glial-specific manner. A JC virus T antigen expression plasmid generated a 95-kDa protein which exhibited nuclear localization and physical association with p53. T antigen repressed the JC virus and SV40 early promoters 4- to 5-fold in glioma cells. Conversely, T antigen induced 100- to 200-fold activation of the JC virus early promoter in nonglial cells, whereas the SV40 promoter was repressed. Activation required the JC virus TATA box sequence and a pentanucleotide repeat immediately upstream of the TATA box, but was independent of the upstream enhancer region. These data demonstrate that the JC virus basal promoter is responsible for glial-specific gene expression and suggest a mechanism for this regulation.