The sequence and biochemical requirements of pre-mRNA polyadenylation were investigated using the simian virus 40 (SV40) early polyadenylatin site. This signal directs 3\sp′ processing of two mRNA molecules coding for the large and small T-antigens of the DNA tumor virus SV40. The processing of this site was studied using a nuclear extract capable of accurately and efficiently polyadenylating exogenously provided RNA molecules. The sequence requirements of polyadenylation were examined by point mutagenesis of conserved sequence elements within the SV40 early site followed by assay of their effect on in vitro polyadenylation. Alteration of the internal pyrimidine of the highly conserved sequence AAUAAA from U to an A abolishes cleavage at the normal polyadenylation site and activates a minor site downstream of the distal, usually inactive, hexanucleotide. Point mutation of the conserved CAYUG element decreases the efficiency of cleavage without changing its specificity. Complete removal of this sequence abolishes cleavage of the SV40 early polyadenylation site. These results suggest that multiple sequence elements are involved in generating accurately polyadenylated RNA from the SV40 early genes. The ATP requirement of the polyadenylation cleavage reaction was examined by removal of ATP from in vitro reactions using the SV40 early and the adenovirus L3 substrate RNAs. In vitro polyadenylation of the SV40 early site requires 1mM ATP to meet the energy requirements of endonucleolytic cleavage as well as to provide substrate for polymerization. At ATP concentrations below 0.1 mM, the SV40 early polyadenylation site is subject to alternate cleavage approximately 21 nucleotides downstream of the correct cleavage site. Adenovirus L3 RNA is not an efficient substrate for alternate cleavage in the absence of ATP. This alternate activity has many characteristics in common with the correct cleavage. The behavior of the ATP-independent cleavage product is inconsistent with its being an intermediate in the polyadenylation reaction. The ATP-independent cleavage activity requires an intact polyadenylation consensus signal, a 3\sp′ terminus located within 100 nucleotides of the polyadenylation site, and extract U-snRNPs. These requirements suggest that ATP-independent cleavage is an alternate activity of the normal polyadenylation machinery observations suggest that SV40 early and adenovirus L3 RNAs are differentially recognized by the polyadenylation machinery. (Abstract shortened with permission of author.)