Equine arteritis virus (EAV), the type member of the family Arteriviridae, is a single-stranded RNA virus with a positive-stranded genome of approximately 13 kb. EAV uses a discontinuous transcription mechanism to produce a nested set of six subgenomic mRNAs from which its structural genes are expressed. We have generated the first documented arterivirus defective interfering (DI) RNAs by serial undiluted passaging of a wild-type EAV stock in BHK-21 cells. A cDNA copy of the smallest DI RNA (5.6 kb) was cloned. Upon transfection into EAV-infected BHK-21 cells, transcripts derived from this clone (pEDI) were replicated and packaged. Sequencing of pEDI revealed that the DI RNA was composed of three segments of the EAV genome (nucleotides 1 to 1057, 1388 to 1684, and 8530 to 12704) which were fused in frame with respect to the replicase reading frame. Remarkably, this DI RNA has retained all of the sequences encoding the structural proteins. By insertion of the chloramphenicol acetyltransferase reporter gene in the DI RNA genome, we were able to delimitate the sequences required for replication/DI-based transcription and packaging of EAV DI RNAs and to reduce the maximal size of a replication-competent EAV DI RNA to approximately 3 kb.