Tat regulation of human immunodeficiency virus (HIV) transcription is unique because of its specificity for an RNA target, TAR, and its ability to increase the efficiency of elongation by polymerase. A reconstituted reaction that is Tat-specific and TAR-dependent for activation of HIV transcription has been used to identify and partially purify a cellular activity that is required for trans-activation by Tat, but not by other activators. In the reaction, Tat stimulates the efficiency of elongation by polymerase, whereas Sp1 and other DNA sequence-specific transcription factors activate the rate of initiation. Furthermore, while TATA binding protein (TBP)-associated factors (TAFs) in the TFIID complex are required for activation by transcription factors, they are dispensable for Tat function. Thus, Tat acts through a novel mechanism, which is mediated by a specific host cellular factor, to stimulate HIV-1 gene expression.