Each genome segment of the prototypic arenavirus lymphocytic choriomeningitis virus (LCMV), encodes two genes in ambisense orientation, separated by an intergenic region (IGR). The 3' ends of subgenomic viral mRNAs have been mapped to a stem-loop structure within the IGR, suggesting structure-dependent transcription termination. We have studied the role of the LCMV IGR by using a minigenome (MG) rescue system based on RNA analogues of the short genome segment. An ambisense MG coding for chloramphenicol acetyltransferase (CAT) and green fluorescent protein reporter genes instead of the nucleoprotein and glycoprotein open reading frames, respectively, served as a template for synthesis of full-length anti-MG (aMG) replicate and subgenomic size mRNA for reporter gene expression. An analogous MG without IGR was amplified by the virus polymerase with equal efficiency, but subgenomic mRNA was undetectable. Reporter gene expression from IGR-deficient aMG CAT-sense RNA of genomic length was approximately 5-fold less efficient than that from subgenomic CAT mRNA derived from an IGR-containing MG, but at least 100-fold more efficient than that from a T7 RNA polymerase transcript with the same sequence. Therefore, in the absence of IGR-mediated transcription termination, a fraction of full-length aMG RNA appears to behave as bona fide mRNA. Unexpectedly, MGs without IGR were dramatically impaired in their ability to passage reporter gene activity via infectious virus-like particles. These data suggest that the LCMV IGR serves individual functions in transcription termination for enhanced gene expression and in the virus assembly and/or budding, which are required for the efficient propagation of LCMV infectivity.