Using a one-step model for cell-to-cell transmission of HIV infection we have identified two distinct phases of HIV RNA synthesis. The first phase (4 h-12 h p.i.) was marked by an increase in only the full-length 9 kb RNA, while the second phase (24 h p.i. onwards) comprised a significant increase in the levels of all three species of viral RNA. We now report that while the continual presence of actinomycin D at 50 micrograms/ml abolished all detectable viral nucleic acid synthesis when virus donor H3B cells were pre-treated with 50 micrograms/ml of actinomycin D (AmD), washed free of unbound drug (a procedure which inhibited > 99% of total cellular RNA transcription) then mixed with untreated recipient Hut 78 cells, normal amounts of full length linear unintegrated viral DNA were produced and the first phase of viral RNA transcription was unaffected. Similarly, when both the virus donor cells and recipient cells were arrested in the late G1 phase of the cell cycle by aphidicolin and then mixed, linear unintegrated viral DNA was the major viral DNA species produced. The appearance of circular viral DNA and progeny virus was inhibited, but the first phase of induced viral RNA synthesis was unaffected. When AZT was added at 2 h or 4 h after cell-cell mixing, the level of 9 kb RNA detected was significantly lower, corresponding to reduction in the level of viral DNA. These and previous results indicate that the template for the first phase of viral RNA synthesis was likely to be newly synthesized, linear unintegrated viral DNA and not pre-existing proviral DNA present in the donor cells. Taken together, our results suggest that there exists a yet to be fully characterized pathway of concurrent viral DNA and RNA synthesis early after cell to cell transmission of HIV infection.