Human T cell lymphotropic virus type I (HTLV-I) encodes the transactivator protein, Tax, which facilitates viral transcription from three 21 bp repeated elements within the U3 region of the long terminal repeat (LTR). Examination of the basal factors interacting with the 21 bp repeat elements through electrophoretic mobility shift (EMS) analyses has demonstrated the formation of DNA-protein complexes common to each of the 21 bp repeats (C1-C3) as well as three DNA-protein complexes specific to the promoter proximal (pp) repeat (U1 (U1A/U1B) and U2; 1-4). These studies have indicated that the individual repeats are not identical with respect to the cellular factors with which they interact. EMS analyses utilizing a series of mutated pp repeat elements demonstrate that the nucleotide sequence requirements for U1 (U1A/U1B) and U2 formation are separable from those required for C1-C3 formation. Competition EMS analyses utilizing Sp1 and CREB binding site oligonucleotides demonstrate that Sp family members are critical components of U1 (U1A/U1B) and U2 and that ATF/CREB family members are critical components of C1-C3. EMS supershift analyses have demonstrated that Sp1 is involved in U1A formation while Sp3 is involved in U1B and U2 formation. EMS analyses performed with nuclear extracts from Tax-expressing Jurkat cells and HTLV-I-transformed peripheral blood mononuclear cells demonstrate that Tax prevents the formation of U1 (U1A/U1B) and U2 DNA-protein complexes. Therefore, Tax appears to inhibit the interaction of Sp family members with the pp repeat. Based on these observations, it is possible that the interaction of Sp and ATF/CREB family members with the pp repeat during basal and Tax-mediated transcription may play a critical role in viral gene expression during the initial stages of virus infection or during activation of a latent infection.