The Mov-3 substrain of mice carries Moloney murine leukemia virus as a Mendelian gene in its germ line. All mice segregating the Mov-3 locus activate virus and develop viremia and leukemia. The integrated provirus (i.e., Mov-3 locus) was molecularly cloned from Mov-3 liver DNA as a 16.8 kilobase long EcoRI fragment. Comparison of the cloned and genomic Mov-3 specific EcoRI fragment by restriction enzyme analysis showed no differences in the size of the fragments, indicating that no major sequence rearrangements occurred during cloning. The genomic and cloned Mov-3 DNAs were compared for methylation and infectivity. Analysis with Hha I showed that the genomic proviral and the flanking mouse sequences were methylated at cytosine residues, in contrast to the cloned Mov-3 locus. The cloned Mov-3 locus, however, was highly infectious in a transfection assay (1 x 10(-3) plaque-forming unit per viral genome) in contrast to the genomic Mov-3 DNA (less than 10(-7) per viral genome). Our results suggest that genes containing 5-methylcytosine are not expressed after transfection into susceptible cells and that removal of the methyl groups by molecular cloning in prokaryotes leads to expression generating infectious proviral DNA. If gene expression of transfected DNA is controlled by mechanisms that are relevant for gene expression in the animal, this suggests that DNA methylation may play a causative role in eukaryotic gene regulation.