Cells latently infected with Epstein-Barr virus (EBV) can be activated to express lytic-cycle polypeptides by the introduction of the EBV-encoded Z transactivator, indicating that this protein has a pivotal role in virus reactivation. We examined the target specificity of the Z transactivator in short-term contransfection assays and found that the most responsive target to Z transactivation was the divergent NotI repeat promoter, located within the EBV BamHI H fragment. In contrast, target plasmids containing the cat gene linked to heterologous viral promoters were not activated by cotransfection with the Z gene. S1 nuclease analysis of RNA from chemically induced B95-8 cells and from Vero cells cotransfected with NotI repeat promoter-CAT and Z showed that Z transactivation increased the level of correctly initiated, stable RNA transcripts. The NotI repeat gene (ntr) gives rise to a highly abundant mRNA species after chemical induction of lytic virus replication, but no protein product had been previously identified. Using monospecific antiserum raised against a synthetic peptide from the BHLF1 open reading frame, we demonstrated that the ntr gene encodes a protein product that is found in nuclear patches colocalizing with nucleoli. A series of deletions introduced into the upstream sequences of the NotI-repeat-promoter revealed two separate Z-response regions. The minimal promoter region between -7 and -155 of the leftward RNA cap site and an upstream region between -644 and -902 were both independently capable of conferring Z responsiveness. However, the minimal region, which was activated by Z cotransfection in Vero cells, was poorly responsive in lymphocytes, whereas the response of the far-upstream region to Z cotransfection was lymphocyte specific. In its human host, EBV infects both epithelial and lymphocyte populations. This dual lifestyle may have led to the evolution of multiple Z-response signals that enable the Z transactivator to interact with both cell-specific promoter and enhancer factors.