Wild-type Indiana virus transcribed four 11- to 14-nucleotide-long, 5' N-gene mRNA sequences in vitro. The amount of oligonucleotides synthesized relative to leader by wild-type virions varied inversely with the salt concentration of the transcription reaction. Reduced oligonucleotide synthesis by nucleocapsids at all salt concentrations tested and a comparison of the proteins remaining bound to the template of nucleocapsids and virions transcribed in different NaCl concentrations suggested that the matrix (M) protein regulates oligonucleotide synthesis. Examination of the transcription products synthesized in no NaCl and 0.144 M NaCl by an M-protein mutant and an increase in oligonucleotide synthesis by nucleocapsids when purified M-protein was added to transcription reactions confirmed M-protein's role in oligonucleotide synthesis. Wild-type virion mRNA synthesis was inhibited, and oligonucleotide synthesis was greater than leader synthesis at high virus concentrations. As the virus was diluted, inhibition of mRNA synthesis was relieved and oligonucleotide synthesis was reduced. The M-protein mutant tsG33 exhibited neither transcription inhibition at high virus concentrations nor the reciprocal synthesis of mRNA and the oligonucleotides seen with wild-type virions. These results are entirely consistent with the stop-start model of transcription and suggest a model for the control of transcription by M-protein.