We describe a stable and sensitive HIV evaluation system, which discriminates HIV-specific membrane fusion and early transcription events and is suitable for high-throughput inhibitor screening. A human lymphocytic line, constitutively producing infectious HIV-1, serves as Env-positive donor. A second indicator cell line carries a silent HIV-1 LTR lacZ reporter plasmid. A bicellular cocultivation setup allows titration and standardization of "fusion-induced gene stimulation (FIGS)" events. With few manipulations aspects of fusion and/or LTR induction can be distinguished and simultaneously assayed. Anti-Env-V3 antibodies prevent fusion and subsequent lacZ induction, and a Tat-specific inhibitor blocks only lacZ induction in a dose dependent manner without affecting membrane fusion. The LTR reporter is readily activated by Tat from HIV-1, HIV-2, or SIV and it responds to exogenous Tat protein. The reporter system is sensitive enough to detect single infection events on pre-seeded layers of indicator cells, which renders it potentially useful for direct virus quantification in patients' material. Moreover, our system allows to control and normalize DNA transfection efficiencies of HIV-derived plasmids. This aspect is particularly valuable for studies of RT- and protease-inhibitors and resistances, where p24 or supernatant reverse transcriptase, otherwise standard virus readouts, can be directly affected by inhibitors or mutations.