The transcription factor hXBP-1 belongs to the family of basic region/leucine zipper (bZIP) proteins and interacts with the cAMP responsive element (CRE) of the major histocompatibility complex (MHC) class II A alpha, DR alpha and DP beta genes. However, the developmental expression of hXBP-1 as revealed by in situ hybridization in mouse embryos, has suggested that it interacts with the promoter of additional genes. To identify other potential target genes of this factor, we performed binding site selection experiments with recombinant hXBP-1 protein. The results indicated that hXBP-1 binds preferably to the CRE-like element GAT-GACGTG(T/G)NNN(A/T)T, wherein the core sequence ACGT is highly conserved, and that it also binds to some TPA response elements (TRE). hXBP-1 can transactivate multimers of the target sequences to which it binds in COS cells, and the level of transactivation directly correlates with the extent of binding as observed in gel retardation experiments. One target sequence that is strongly bound by hXBP-1 is the 21 bp repeat in the HTLV-1 LTR, and we demonstrate here that hXBP-1 can transactivate the HTLV-1 LTR. Further, the transactivation domain of hXBP-1 encompasses a large C-terminal region of the protein, containing domains rich in glutamine, serine and threonine, and proline and glutamine residues, as shown in transient transfection experiments using hXBP-1-GAL4 fusion proteins and a reporter gene under the control of GAL4-binding sites.