Ty3 is a Saccharomyces cerevisiae retrotransposon associated with tRNA genes. Two Ty3 elements have been cloned and characterized. The complete nucleotide sequence for one element, Ty3-2, was reported previously (L. J. Hansen, D. L. Chalker, and S. B. Sandmeyer, Mol. Cell. Biol. 9:5245-5256, 1988). However, this element is incapable of autonomous transposition. The complete DNA sequence of a transpositionally competent Ty3 element, Ty3-1, is presented here. Its sequence translates into two overlapping open reading frames, TYA3-1 and TYB3-1, which encode proteins with homology to the proteins specified by the retroviral gag and pol genes, respectively. Comparison of the Ty3-1 nucleotide sequence to Ty3-2 suggests that the TYB3-2 open reading frame of Ty3-2 is truncated by the deletion of a single nucleotide, which causes a frameshift mutation. Restoration of the reading frame with insertion of a single adenine by site-directed mutagenesis converted Ty3-2 into a transpositionally active element, Ty3-2(+ A). Western blot analysis with antibodies made against synthetic peptides identified integrase (IN) proteins in viruslike particle preparations from cells expressing Ty3 elements. Cells expressing Ty3-1 and Ty3-2 (+A) produce antibody-reactive proteins with approximate molecular masses of 61 and 58 kilodaltons (kDa), while cells expressing Ty3-2 produce reactive proteins of approximately 52 and 49 kDa. Together, these data show that the 61- or 58-kDa protein, or both, provides the integrase function of Ty3.