The ability of the Rex protein of the type I human T-cell leukemia virus (HTLV-I) to regulate expression of the retroviral gag and env structural genes post-transcriptionally is critically dependent on the presence of a Rex response element (RexRE). This cis-regulatory sequence is located within the retroviral 3' long terminal repeat and coincides with a predicted, highly stable RNA stem-loop structure. Rex action requires both the overall secondary structure intrinsic to the RexRE and specific sequences from one small subregion of this large structure. This small subregion likely forms a protein-binding site for Rex or a cellular RNA-binding factor. Whereas Rex can functionally replace the Rev protein of the type 1 human immunodeficiency virus (HIV-1) through its interaction with the analogous Rev response element (RevRE), distinct subregions of this HIV-1 RNA element mediate the responses to Rex and Rev. Strikingly, Rex acts as a dominant repressor of Rev action, following the deletion of the Rex responsive subregion of the RevRE. Similarly, Rev inhibits Rex function in a dominant manner when the Rev responsive subregion of the RevRE is deleted. Together, these findings suggest that Rex and Rev not only interact with their respective RNA response elements but also may either form mixed inactive multimers or interact with a common cellular factor(s). If binding of a common host protein is involved, this factor likely plays a central role either in spliceosome assembly or nuclear RNA transport.