Fourteen mutants were used to delineate a minimal activation domain in the Tax protein of human T-cell leukemia virus type I. In an assay using a Gal4-Tax (GalTx) fusion protein and a responsive promoter containing Gal4 consensus binding sites, we found that activation was "squelched" by coexpression of wild-type Tax protein in trans. When Tax mutants were tested for squelching, many competed effectively against GalTx. However, those containing changes in amino acids 289 to 322 failed to inhibit activity. In particular, three mutants that were expressed stably, with changes at amino acids 289, 296, and 320 respectively, did not squelch GalTx activity. On the other hand, mutants with individual changes at amino acid 3, 9, 29, 41, 273, and 337 efficiently inhibited GalTx function. Three other mutants failed to be stably expressed. In separate experiments, when fused alone to the DNA-binding domain of Gal4, amino acids 289 to 322 of Tax conferred trans activation ability. This fusion protein was able to activate a core promoter. These findings suggest that amino acids 289 to 322 define a region that contacts an essential transcription factor and that this region is a modular activation domain.