The varicella-zoster virus (VZV) IE62 protein is the major transcriptional activator. IE62 is capable of associating with DNA both nonspecifically and in a sequence-specific manner via a consensus binding site (5'-ATCGT-3'). However, the function of the consensus site is poorly understood, since IE62 efficiently transactivates promoter elements lacking this sequence. In the work presented here, sequence analysis of the VZV genome revealed the presence of 245 IE62 consensus sites throughout the genome. Some 54 sites were found to be present within putative VZV promoters. Electrophoretic mobility shift assay (EMSA) experiments using an IE62 fragment containing the IE62 DNA-binding domain and duplex oligonucleotides that did or did not contain the IE62 consensus binding sequence yielded K(D) (equilibrium dissociation constant) values in the nanomolar range. Further, the IE62 DNA binding domain was shown to have a 5-fold-increased affinity for its consensus site compared to nonconsensus sequences. The effect of consensus site presence and position on IE62-mediated activation of native VZV and model promoters was examined using site-specific mutagenesis and transfection and superinfection reporter assays. In all promoters examined, the consensus sequence functioned as a distance-dependent repressive element. Protein recruitment assays utilizing the VZV gI promoter indicated that the presence of the consensus site increased the recruitment of IE62 but not Sp1. These data suggest a model where the IE62 consensus site functions to down-modulate IE62 activation, and interaction of IE62 with this sequence may result in loss or decrease of the ability of IE62 to recruit cellular factors needed for full promoter activation.