Progressive multifocal leukoencephalopathy (PML) is a fatal demyelinating disease caused by cytolytic destruction of oligodendrocytes, the myelin-producing cells of the central nervous system, by the human neurotropic JC virus (JCV). The early protein of JCV, T antigen, which is produced at the early stage of infection, is important for orchestrating the events leading to viral lytic infection and cytolytic destruction of oligodendrocytes. Results from transgenic mouse studies, however, have revealed that, in the absence of lytic infection, this protein can induce brain hypomyelination and suppression of myelin gene expression. Since expression of the gene encoding myelin basic protein, the major component of myelin, can be regulated by a DNA-binding transcription factor, MEF-1/Pur, (Pur), we have examined the level of this protein in transgenic mouse brains. Results from immunoprecipitation and Western blots showed that while there was no drastic decrease in the level of MEF-1/Pur in transgenic mouse brains, JCV T antigen was found in a complex with MEF-1/Pur. Immunohistological studies revealed abnormal oligodendrocytes in white matter, where MEF-1/Pur and T antigen were detected. Furthermore, immunogold electron microscopic studies revealed that Pur and T antigen are colocalized in the nucleus of the oligodendrocytes and in hippocampal neurons. Interestingly, results from cell culture studies revealed that incubation of oligodendrocytes with JCV led to a drastic decrease in the level of MEF-1/Pur protein. These observations provide insight into the molecular pathogenesis of PML and support a model for a dual effect of JCV on inducing hypomyelination by (i) affecting myelin gene expression via interaction of JCV T antigen and the myelin gene transcription factor, MEF-1/Pur, and (ii) causing a decline in the level of the host regulatory proteins, including MEF-1/Pur, which are involved in myelin gene expression.