The 5(-terminal leader sequence of the equine arteritis virus (EAV) genome contains an open reading frame (ORF) with an AUG codon in a suboptimal context for initiation of protein synthesis. To investigate the significance of this intraleader ORF (ILO), an expression plasmid was generated carrying a DNA copy of the subgenomic mRNA7 behind a T7 promoter. Capped RNA transcribed from this construct was shown to direct, in an in vitro translation system, the synthesis of leader peptide as well as N protein. Site-directed mutations aimed to either optimize or weaken the sequence context of the ILO start codon affected leader peptide synthesis as predicted; no peptide was detected when the initiation codon was incapacitated. Translation of the downstream N gene was inversely affected by leader peptide production, consistent with a ribosomal leaky scanning mechanism. To investigate the role of the leader peptide in the EAV replication life cycle we generated, using an infectious EAV cDNA clone, two mutant viruses in one of which the ILO start codon was in an optimal Kozak context for translation initiation while in the other the codon was again incapacitated. Surprizingly, both mutant viruses were equally viable and exhibited similar phenotypes in BHK-21 cells. However, their replication kinetics and viral yields were reduced relative to that of the wild-type parental virus, as were their plaque sizes. Importantly, the mutations introduced into the viruses appeared to be rapidly and precisely repaired upon passaging. Already after one viral passage a significant fraction of the viruses had regained the wild-type sequence as well as its phenotype. The results demonstrate that EAV replication is not dependent on the synthesis of the intraleader peptide. Rather, the leader peptide does not seem to have any function in the EAV life cycle. As we discuss, the available data indicate that the ILO 5 (nucleotide sequence per se, not its functioning in translation initiation, is of critical importance for EAV replication.