High-level expression of a transpositionally competent Ty1 element fused to the inducible GAL1 promoter on a 2 microns plasmid (pGTy1) overcomes transpositional dormancy in Saccharomyces cerevisiae. To investigate the mechanisms controlling the rate of Ty1 retrotransposition, we quantitated transposition and Ty1 gene products in cells induced and uninduced for expression of pGTy1. The increase in Ty1 transposition was 45- to 125-fold greater than the increase in Ty1 RNA effected by pGTy1 induction. Translational efficiency of Ty1 RNA was not altered in transposition-induced cells, since p190TYA1-TYB1 protein synthesis increased in proportion to steady-state Ty1 RNA levels. Therefore, expression of a pGTy1 element increases the efficiency of Ty1 transposition at a posttranslational level. Galactose induction of pGTy1 enhanced TYA1 protein processing and allowed detection of processed TYB1 proteins, which are normally present at very low levels in uninduced cells. When the ability of genomic Ty1 elements to complement defined mutations in HIS3-marked pGTy1 elements was examined, mutations in the protease domain or certain mutations in the integrase domain failed to be complemented, but mutations in the reverse transcriptase domain were partially complemented by genomic Ty1 elements. Therefore, the activity of Ty1 elements in yeast cells may be limited by the availability of Ty1 protease and possibly integrase. These results suggest that Ty1 transposition is regulated at the level of protein processing and that this regulation is overcome by expression of a pGTy1 element.