Abstract: We have shown that adenovirus-2 early region 1 gene products in trans and the SV40 enhancer in cis have an additive effect in stimulating transcription from adenovirus IVa2 and major late promoters (Natarajan, V. and Salzman, N. P., Nucleic Acids Research 13, 4067, 1985). In the present study, we show that both the E1a and E1b gene products are necessary for this stimulatory effect on enhancer mediated transcription. In the absence of E1b region, the transcription is strongly suppressed by E1a. Transcription from E1a promoter is also stimulated 4-5 fold in the presence of E1b region. The data suggest that 21K protein coded by the E1b region modulates transcription from the E1a promoter and the action of E1a gene products on transcription from other promoters.