We describe experiments which demonstrated that the simian virus 40 (SV40) enhancer affects certain transcriptional units differently. We also found that a specific enhancer-transcriptional unit interaction can be regulated by trans-acting factors. Using transient assays, we examined the effects of the SV40 enhancer on herpesvirus thymidine kinase (tk) RNA levels when transcription was initiated either by the herpesvirus tk promoter or by an SV40 early promoter-tk fusion. We were unable to detect any effect of the enhancer on transcription from the tk promoter in CV-1 or HeLa cells. However, we found that the addition of T-antigen in trans allowed the enhancer to stimulate expression from the tk promoter. This induction by T-antigen did not require T-antigen-binding sites in cis and appeared to be an indirect effect. In contrast, tk expression from the SV40 early promoter fusion was greatly stimulated by the enhancer in CV-1 cells. Furthermore, in 293 cells the SV40 enhancer had only a marginal effect on the SV40 promoter-tk fusion, whereas it strongly stimulated tk expression from the tk promoter. Our results raise the possibility that the enhancer function may not show cell specificity per se; rather, the interaction between the enhancer and a specific gene may be responsible for cell specificity. We discuss these observations in terms of the SV40 early gene-to-late gene switch that occurs during SV40 lytic growth.