Human T-cell leukemia virus type 1 (HTLV-1) is an oncogenic retrovirus that induces a fatal T-cell malignancy, adult T-cell leukemia (ATL). Among several regulatory/accessory genes in HTLV-1, HTLV-1 bZIP factor (HBZ) is the only viral gene constitutively expressed in infected cells. Our previous study showed that HBZ functions in two different molecular forms, HBZ protein and HBZ RNA. In this study, we show that HBZ protein targets retinoblastoma protein (Rb), which is a critical tumor suppressor in many types of cancers. HBZ protein interacts with the Rb/E2F-1 complex and activates the transcription of E2F-target genes associated with cell cycle progression and apoptosis. Mouse primary CD4(+) T cells transduced with HBZ show accelerated G1/S transition and apoptosis, and importantly, T cells from HBZ transgenic (HBZ-Tg) mice also demonstrate enhanced cell proliferation and apoptosis. To evaluate the functions of HBZ protein alone in vivo, we generated a new transgenic mouse strain that expresses HBZ mRNA altered by silent mutations but encoding intact protein. In these mice, the numbers of effector/memory and Foxp3(+) T cells were increased, and genes associated with proliferation and apoptosis were upregulated. This study shows that HBZ protein promotes cell proliferation and apoptosis in primary CD4(+) T cells through activation of the Rb/E2F pathway, and that HBZ protein also confers onto CD4(+) T-cell immunophenotype similar to those of ATL cells, suggesting that HBZ protein has important roles in dysregulation of CD4(+) T cells infected with HTLV-1.