The adenovirus inverted terminal repeat (ITR) contains a number of cis-acting elements that are involved in the initiation of viral DNA replication, as well as multiple binding motifs for the cellular transcription factors SP1 and ATF. In this study, we utilized a Hela cell transcription extract to demonstrate that the adenovirus type 5 ITR promotes bidirectional transcription in vitro. Primer extension analyses demonstrated that the ITR directed transcription at initiation sites both within the terminal repeat and at fixed distances outside of the ITR. The ITR also strongly stimulated transcription at the early region 1A (E1A) initiation site when it was situated immediately upstream of the E1A TATA box region. Deletion and point mutational analyses demonstrated that two distinct cis-acting elements were involved in these ITR-dependent transcriptional activities in vitro. Cellular transcription factors SP1 and ATF were previously shown to bind to these two regions. Analysis of viral mutants in vivo demonstrated that the NFIII/OCT-1 binding site and a conserved ATF motif were important for efficient viral growth. Regulatory elements in the ITR flanking region were found to functionally substitute for these sites.