The baculovirus-integrated retrotransposon TED encodes gag and pol proteins that assemble into viruslike particles with reverse transcriptase.

TED is a lepidopteran retrotransposon found inserted within the DNA genome of the Autographa californica nuclear polyhedrosis virus mutant, FP-D. To examine the proteins and functions encoded by this representative of the gypsy family of retrotransposons, the gag- and pol-like open reading frames (ORFs 1 and 2) were expressed in homologous lepidopteran cells by using recombinant baculovirus vectors. Expression of ORF 1 resulted in synthesis of an abundant TED-specific protein (Pr55gag) that assembled into viruslike particles with a diameter of 55 to 60 nm. Expression of ORF 2, requiring a -1 translational frameshift, resulted in synthesis of a protease that mediated cleavage of Pr55gag to generate p37, the major protein component of the resulting particles. Expression of ORF 2 also produced reverse transcriptase that associated with these particles. Both protease and reverse transcriptase activities mapped to domains within ORF 2 that contain sequence similarities with the corresponding functional domains of the pol gene of the vertebrate retroviruses. These results indicated that TED ORFs 1 and 2 functionally resemble the retrovirus gag and pol genes and demonstrated for the first time that an invertebrate member of the gypsy family of elements encodes active forms of the structural and enzymatic functions necessary for transposition via an RNA intermediate. TED integration within the baculovirus genome thus represents one of the first examples of transposon-mediated transfer of host-derived genes to an eukaryotic virus.