Transcription of pathogenic equine infectious anemia virus (EIAV) in an acutely infected horse was examined by using the polymerase chain reaction and nucleotide sequencing. Four spliced transcripts were identified in liver tissue, in contrast to the multiplicity of alternatively spliced messages reported for in vitro-propagated human immunodeficiency virus, simian immunodeficiency virus, and, to a lesser extent, EIAV. Nucleotide sequence analysis demonstrated that three of these mRNAs encode known viral proteins: the envelope precursor, the product of the S2 open reading frame, and the regulatory proteins Tat and Rev. The fourth transcript encodes a novel Tat-TM fusion protein, Ttm. Ttm is a 27-kDa protein translated from the putative tat CTG initiation codon and containing the carboxy-terminal portion of TM immediately downstream from the membrane-spanning domain. p27ttm is expressed in EIAV-infected canine cells and was recognized by peptide antisera against both Tat and TM. Cells transfected with ttm cDNA also expressed p27ttm, which appeared to be localized to the endoplasmic reticulum or Golgi apparatus by indirect immunofluorescence. The carboxy terminus of lentiviral TM proteins has previously been shown to influence viral infectivity, growth kinetics, and cytopathology, suggesting that Ttm plays an important role in the EIAV life cycle.