Regulation of HIV-1 gene expression by the viral Tat transactivator is a critical step in the viral life cycle. Tat acts as a highly unusual transcription factor that interacts with a stem-loop RNA structure (TAR) found at the 5' end of all viral transcripts. There, it induces a modification of chromatin at the HIV-1 long terminal repeat (LTR) promoter and stimulates the recruitment of elongation-competent RNA polymerase II complexes capable of processive transcription. Increase of transcriptional elongation is the consequence of the interaction of Tat with cyclin T1, the cyclin component of CDK9, which phosphorylates the carboxy-terminal domain of RNA polymerase II to enhance its processivity. Tat-induced transcriptional activation of the LTR promoter is concomitant with recruitment of the transcriptional coactivators p300 and the highly homologue cAMP-responsive transcription factor binding protein (CBP). These large proteins act at the level of transcriptional initiation by bridging the basal transcription machinery with specific transcriptional activators. Furthermore, p300/CBP are histone acetyl-transferases capable of modulating the interaction of nucleosomes with DNA and with chromatin remodeling complexes. Besides histones, Tat itself is a substrate for the enzymatic activity of p300/CBP and of the associated factor P/CAF, suggesting a regulatory role of acetylation on the protein itself. Devising a unifying model for LTR activation that includes activities of Tat at the levels of both transcriptional initiation and transcriptional elongation is a challenging task at this moment. Nevertheless, protein localization studies indicate that both cyclin T1 and p300/CBP co-localize in specific subnuclear compartments, thus suggesting participation of both proteins in the formation of multimolecular complexes governing coordinated steps of transcriptional activation.