X-box binding protein 1 (XBP-1), a basic leucine zipper transcription factor, plays a key role in the cellular unfolded protein response (UPR). There are two XBP-1 isoforms in cells, spliced XBP-1S and unspliced XBP-1U. XBP-1U has been shown to bind to the 21-bp Tax-responsive element of the human T-lymphotropic virus type 1 (HTLV-1) long terminal repeat (LTR) in vitro and transactivate HTLV-1 transcription. Here we identify XBP-1S as a transcription activator of HTLV-1. Compared to XBP-1U, XBP-1S demonstrates stronger activating effects on both basal and Tax-activated HTLV-1 transcription in cells. Our results show that both XBP-1S and XBP-1U interact with Tax and bind to the HTLV-1 LTR in vivo. In addition, elevated mRNA levels of the gene for XBP-1 and several UPR genes were detected in the HTLV-1-infected C10/MJ and MT2 T-cell lines, suggesting that HTLV-1 infection may trigger the UPR in host cells. We also identify Tax as a positive regulator of the expression of the gene for XBP-1. Activation of the UPR by tunicamycin showed no effect on the HTLV-1 LTR, suggesting that HTLV-1 transcription is specifically regulated by XBP-1. Collectively, our study demonstrates a novel host-virus interaction between a cellular factor XBP-1 and transcriptional regulation of HTLV-1.