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Bovine herpesvirus type 1 (BHV-1) is an important pathogen that can initiate bovine respiratory disease complex. Like other members of the subfamily Alphaherpesvirinae, BHV-1 establishes latency in sensory neurons. The latency-related (LR) gene expresses a family of alternatively spliced transcripts in infected sensory neurons that have the potential to encode several LR proteins. An LR mutant virus that contains three stop codons near the 5’ terminus of the first open reading frame in the LR gene does not express two LR proteins or reactivate from latency. In addition, the LR mutant virus induces higher levels of apoptosis in trigeminal ganglionic neurons and grows less efficiently in certain tissues of infected calves. In spite of the reduced pathogenesis, the LR mutant virus, wild-type BHV-1, and the LR rescued virus exhibit identical growth properties in cultured bovine cells. In this study, we demonstrated that during early phases of productive infection the LR mutant virus expressed higher levels of LR-RNA relative to the LR rescued virus or wt BHV-1. Bovine kidney cells infected with the LR mutant virus also induced higher levels of beta interferon RNA and interferon response genes. These results suggest that inappropriate expression of LR-RNA, in the absence of LR protein expression, may influence the latency-reactivation cycle and pathogenic potential of BHV-1.