The salivary gland has long been recognized as an important target organ for cytomegalovirus replication in the infected host. A viral gene, denoted sgg1, plays an important role for replication in the salivary gland even though it is dispensable for growth in other organs or in cultured cells. The nucleotide sequence of this gene and of cDNA clones representing two spliced transcripts (1.5 and 1.8 kb in size) has been determined. The more abundant 1.5-kb transcript contains a 312-amino-acid (aa) open reading frame (ORF) and encodes the corresponding 37-kDa protein (Sgg1) when expressed in transfected COS-7 cells. The 1.8-kb transcript initiates upstream of the 1.5-kb transcript and contains a 108-aa ORF in addition to the 312-aa ORF. This longer cDNA also encodes the 37-kDa protein Sgg1, although at lower abundance than the 1.5-kb cDNA. Sgg1 localizes to the cytoplasm of COS-7 cells, which is consistent with the predicted structural characteristics of the 312-aa ORF: a type 1 integral membrane protein. During viral infection, expression of both sgg1 transcripts is highest at early times (8 to 12 h) after infection; only the 1.5-kb transcript is present, at low levels, late in infection. A recombinant virus, RM868, carrying a lacZ-gpt insertion within sgg1, fails to express Sgg1 protein and exhibits reduced growth in the salivary gland. RM868 retains the capacity to disseminate in the infected mouse and to enter serous acinar cells, although it fails to replicate efficiently in this cell type. These results suggest that sgg1 is critical for high levels of viral replication in the salivary gland.