The product of the retinoblastoma (Rb) gene can form complexes with the transforming proteins of small DNA tumor viruses, including SV40 large T antigen (Tag), adenovirus E1A, and the human papilloma virus E7. The strong correlation between their ability to transform and their ability to bind Rb protein suggests that these oncoproteins exert their effect through blocking the Rb function. SV40 Tag causes oncogenic cell transformation of rodent cells, and it is also required for viral DNA replication. In this paper, we investigated the effect of the Rb protein on the SV40 replication associated function of Tag. We present evidence suggesting that the complex formation between Rb and Tag interferes with the viral DNA replication. In Y79 retinoblastoma and Saos-2 osteosarcoma cells, which lack functional Rb protein, a SV40 based plasmid vector, pSVEpR4, replicates well. In the same cells reconstituted for Rb expression with an intact Rb gene introduced by retroviral mediated gene transfer, pSVEpR4 replicates to a considerably lower level. The inhibitory effect of Rb protein was surmounted by increasing the intracellular level of Tag. Increasing amounts of Tag in wild-type Rb negative Y79 cells had virtually no effect on SV40 replication. Furthermore, the overexpression of Tag in Rb reconstituted Y79 cells did not alter the growth rate of the cells. These data suggest that Rb protein interacts with Tag and modulates its ability to promote SV40 DNA replication.