An in vitro transcription assay was used to study transcription from synthetic RNA corresponding to the 3' terminus of influenza A virus cRNA. Micrococcal nuclease-treated influenza virus ribonucleoprotein was used as a source of active polymerase complex. Mutations at two regions of the 13 nucleotide-long conserved cRNA 3' terminus were shown to reduce transcription templated by the short added model RNAs. The first region, at positions 1 and 2 from the 3' terminus, was shown to be affected by the exact nature of the dinucleotide primer used in the in vitro transcription reactions and may not be relevant in vivo. The second region, centred on positions 11 and 12, may be involved in base pairing with conserved nucleotides at the 5' terminus of the cRNA. Evidence for this comes from the finding that RNA corresponding to 5' conserved sequences, but mutated to restore the postulated base pairing with the mutated 3' ends, could partly restore transcription. Binding of the influenza virus polymerase complex to a set of 5'-mutated RNAs was investigated using a photochemical cross-linking assay. Specific binding to two regions of the cRNA 5' terminus was demonstrated, at positions 1 to 3 and positions 8 to 10. Together, these observations suggest that a panhandle forms from the termini of the cRNA molecule and that this structure may play a role in transcription to produce virion RNA.