GLI proteins are involved in the development of mice, humans, zebrafish, Caenorhabditis elegans, Xenopus, and Drosophila. While these zinc finger-containing proteins bind to TG-rich promoter elements and are known to regulate gene expression in C. elegans and Drosophila, mechanistic understanding of how regulation is mediated through naturally occurring transcriptional promoters is lacking. One isoform of human GLI-2 appears to be identical to a factor previously called Tax helper protein (THP), thus named due to its ability to interact with a TG-rich element in the human T-lymphotropic virus type 1 (HTLV-1) enhancer thought to mediate transcriptional stimulation by the Tax protein of HTLV-1. We now demonstrate that, working through its TG-rich binding site and adjacent elements, GLI-2/THP actually suppresses gene expression driven by the HTLV-1 promoter. GLI-2/THP has no effect on the HTLV-2 promoter, activates expression from the promoters of human immunodeficiency virus types 1 and (HIV-1 and -2), and stimulates HIV-1 replication. Both effective suppression and activation of gene expression and viral replication require the first of the five zinc fingers, which is not necessary for DNA binding, to be intact. Thus, not only can GLI-2/THP either activate or suppress gene expression, depending on the promoter, but the same domain (first zinc finger) mediates both effects. These findings suggest a role for GLI-2 in retroviral gene regulation and shed further light on the mechanisms by which GLI proteins regulate naturally occurring promoters.