HIV-1 encodes a potent trans-activator protein, tat, which is essential for viral gene expression. To study tat domains that function in trans-activation, we chemically synthesized the 86 amino acid tat protein (tat-86) and tat mutant peptides. Remarkably, tat-86 is rapidly taken up by cells, and produces a massive and specific stimulation of HIV-LTR-driven RNA synthesis. Mutant peptides of 21 to 41 amino acids exhibit significant activity. Only two regions are essential for trans-activation; we suggest that one represents an activation region and the other, a nucleic acid binding or nuclear targeting region. Amino acid substitutions within these regions greatly reduce trans-activation, demonstrating the functional significance of these domains. The N-terminal 37 amino acids and exon 2 are not essential. Thus, tat is similar to regulatory proteins of Ad E1A and BPV1 E5 oncogenes, requiring only small domains for autonomous function.