The purified Rel/NF-kappaB (p50/p65) complex and Sp1 markedly activate transcription from the human immunodeficiency virus type 1 (HIV-1) promoter in a highly purified HeLa reconstituted transcription system. Transcriptional activation by NF-kappaB and Sp1 requires both TFIID and the USA fraction. The USA-derived coactivators PC2 and PC4 fully reconstitute the USA coactivator activity, both by repressing the basal level of transcription and by potentiating activator function to yield large increases in the levels of transcription induction. Under limiting concentrations, PC2 and PC4 also show synergistic effects. The C-terminal portion (amino acids 416 to 550) of the p65 subunit of NF-kappaB is a potent activator when assayed as a Gal fusion in the reconstituted transcription system and interacts both with TATA-binding protein (TBP) and with several human TBP-associated factors (TAFs) that include TAFII250. The p65 activation domain mediates transcription activation in the presence of partially reconstituted TFIID species that include a minimal complex containing only TBP and TAFII250. These studies also show that, like USA components, TAFs can serve both to repress TBP-mediated transcription and, following activator interactions, to reverse the repression and effect a net increase in activity. Taken together, these data underscore the importance of both TAFs and specific USA-derived coactivators for optimal activation of the HIV-1 promoter, as well as certain parallels in their overall mechanisms of action.