The nuclear localization of the herpes simplex virus transcriptional activator protein ICP4 was studied by indirect immunofluorescence. At early times after viral infection, ICP4 quickly localized to a diffuse intranuclear distribution. ICP4 later concentrated in globular compartments within the nucleus. The redistribution to the compartments was dependent on viral DNA replication. Double staining for ICP4 and ICP8, the early major DNA-binding protein, revealed that both were found in the same intranuclear globular compartments at late times. These were previously named 'replication compartments' (M.P. Quinlan, L.B. Chen, and D.M. Knipe, Cell 36:857-868, 1984). Because ICP4 and ICP8 are known to function in transcriptional activation and DNA replication, respectively, both DNA replication and late transcription may occur in these compartments. The association of ICP4 and ICP8 with the replication compartments appeared to be independent in that the retention of ICP8 in the compartments required ongoing viral DNA synthesis, while the association of ICP4 was independent of viral DNA synthesis once the compartments were formed. Because ICP4 shows a different distribution at early and late times, stimulation of transcription by ICP4 may involve different molecular events or contacts during these two periods of the replicative cycle.