The Tat protein of the human immunodeficiency virus (HIV) is a powerful activator of HIV gene expression. Genetic and biochemical evidence suggests that one or more cellular cofactors may be important for Tat activity. We have used two-hybrid interactive cloning in yeast to identify a partial cDNA clone (clone 10) from a human B-lymphoblastoid library that specifically interacts with the N-terminal 31 amino acids of HIV-1 Tat which contains the essential cysteine-rich portion of the Tat activation domain. The encoded protein also binds to purified Tat in vitro. Mutation of single essential cysteine residues in Tat abolishes interaction between Tat and clone 10, suggesting that interaction with the encoded protein is important for Tat activity. We have identified the full-length cDNA for the Tat binding protein and shown that overexpression of the encoded protein, Tip60 (Tat interactive protein, 60 kDa), results in a fourfold augmentation of Tat transactivation of the HIV-1 promoter in transient expression assays without increasing the basal activity of the HIV promoter or activating the heterologous RSV promoter. These data together with the genetic and in vitro binding data support the notion that Tip60 might be a cofactor of Tat involved in the regulation of HIV gene expression.