One of the cellular defense mechanisms against virus infection is mediated by activating the interferon-induced, double-stranded-RNA-activated protein kinase, PKR. Upon activation, PKR phosphorylates and thereby inactivates the protein synthesis initiation factor, elF-2, leading to cessation of protein synthesis. Viruses have evolved diverse strategies to counteract this cellular antiviral response. A majority of these strategies target PKR to prevent its activation. Recently, we showed that simian virus 40 (SV40) large-T antigen reverses PKR-mediated translational inhibition at a step downstream of PKR activation (Rajan et al., J. Virol. 69, 785--795, 1995). In this paper, we present evidence showing that SV40 can restore efficient translation in cells despite the elevated levels of phosphorylated elF-2 alpha resulting from PKR activation. Thus, SV40 large-T-mediated translational rescue occurs at a step downstream of elF-2 alpha phosphorylation.