Tat protein of human immunodeficiency virus 1 is a potent trans-activator of viral gene expression. We show that purified Tat protein stimulates transcription from viral promoters greater than 10-fold in vitro. A Tat protein mutant that does not trans-activate in vivo did not stimulate transcription in vitro. Tat trans-activation required a functional TAR RNA sequence; trans-activation was competed by the addition of in vitro synthesized wild-type TAR RNA but not by mutant TAR RNAs. That Tat protein directly interacts with the TAR RNA during trans-activation in vitro was suggested by competition with Tat peptides. Preliminary evidence suggests the involvement of a cellular factor in recognition of TAR RNA during Tat trans-activation. Analysis of Tat trans-activation in vitro will provide new mechanistic insights into this process and allow a more detailed study of the relationship between Tat protein structure and function.