VP16-H is an essential structural protein of herpes simplex virus type 1 (HSV-1) and is also a potent activator of virus immediate-early (IE) gene expression. Current models of functional determinants within VP16-H indicate that it consists of two domains, an N-terminal domain involved in recruiting VP16-H to a multicomponent DNA binding complex with two host proteins, Oct-1 and host cell factor (HCF), and an acidic C-terminal domain exclusively involved in transactivation. VP16-E, from equine herpesvirus 1 (EHV-1), exhibits strong conservation with the N-terminal domain of VP16-H but, with the exception of a short segment at the extreme C terminus, lacks almost the entire acidic C-terminal domain. Studies of key activation determinants within the C terminus of VP16-H would predict that VP16-E may activate poorly, if at all. However, VP16-E is a potent activator of both EHV-1 and HSV-1 IE gene transcription. We show that VP16-E does not follow the simple two-domain model of VP16-H. Thus, despite the conservation in the N-terminal domains, this region in VP16-E is not sufficient for assembly into the DNA binding complex with Oct-1 and HCF. The short conserved determinant close to the C terminus is completely dispensable in VP16-H but is absolutely required in VP16-E. In activation studies, the potency of intact VP16-E was not recapitulated in chimeric proteins in which it was fused with a GAL4 DNA binding domain. Furthermore, a chimeric protein consisting of the C-terminal region of VP16-E fused to the N-terminal domain of VP16-H, while able to promote complex formation, nevertheless exhibited very weak activation. These results indicate that the mode of recruitment of the activation domain, i.e., through complex formation with Oct-1 and HCF, may be crucial for activation and that key determinants required for activation in VP16-E, and possibly VP16-H, may involve interactions between regions of the C terminus and the N terminus rather than discrete domains with independent functions.