The human immunodeficiency virus type 1 (HIV-1) Tat protein, which is essential for HIV gene expression and viral replication, is known to mediate pleiotropic effects on various cell functions. For instance, Tat protein is able to regulate the rate of transcription of host cellular genes and to interact with the signaling machinery, leading to cellular dysfunction. To study the effect that HIV-1 Tat exerts on the host cell, we identified several genes that were up- or down-regulated in tat-expressing cell lines by using the differential display method. HIV-1 Tat specifically increases the expression of the cleavage and polyadenylation specificity factor (CPSF) 73-kDa subunit (CPSF3) without affecting the expression of the 160- and 100-kDa subunits of the CPSF complex. This complex comprises four subunits and has a key function in the 3'-end processing of pre-mRNAs by a coordinated interaction with other factors. CPSF3 overexpression experiments and knockdown of the endogenous CPSF3 by mRNA interference have shown that this subunit of the complex is an important regulatory protein for both viral and cellular gene expression. In addition to the known CPSF3 function in RNA polyadenylation, we also present evidence that this protein exerts transcriptional activities by repressing the mdm2 gene promoter. Thus, HIV-1-Tat up-regulation of CPSF3 could represent a novel mechanism by which this virus increases mRNA processing, causing an increase in both cell and viral gene expression.