Human immunodeficiency virus type 1 (HIV-1) gene expression is modulated by both viral and cellular factors. A regulatory element in the HIV-1 long terminal repeat known as TAR, which extends from nucleotides -18 to +80, is critical for the activation of gene expression by the transactivator protein, Tat. RNA transcribed from TAR forms a stable stem-loop structure which serves as the binding site for both Tat and cellular factors. Although TAR RNA is critical for Tat activation, the role that TAR DNA plays in regulating HIV-1 gene expression is not clear. Several studies have demonstrated that TAR DNA can bind cellular proteins, such as UBP-1/LBP-1, which repress HIV-1 gene expression and other factors which are involved in the generation of short, nonprocessive transcripts. In an attempt to characterize additional cellular factors that bind to TAR DNA, a lambda gt11 expression cloning strategy involving the use of a portion of TAR DNA extending from -18 to +28 to probe a HeLa cDNA library was used. We identified a cDNA, designated TAR DNA-binding protein (TDP-43), which encodes a cellular factor of 43 kDa that binds specifically to pyrimidine-rich motifs in TAR. Antibody to TDP-43 was used in gel retardation assays to demonstrate that endogenous TDP-43, present in HeLa nuclear extract, also bound to TAR DNA. Although TDP-43 bound strongly to double-stranded TAR DNA via its ribonucleoprotein protein-binding motifs, it did not bind to TAR RNA extending from +1 to +80. To determine the function of TDP-43 in regulating HIV-1 gene expression, in vitro transcription analysis was performed. TDP-43 repressed in vitro transcription from the HIV-1 long terminal repeat in both the presence and absence of Tat, but it did not repress transcription from other promoters such as the adenovirus major late promoter. In addition, transfection of a vector which expressed TDP-43 resulted in the repression of gene expression from an HIV-1 provirus. These results indicate that TDP-43 is capable of modulating both in vitro and in vivo HIV-1 gene expression by either altering or blocking the assembly of transcription complexes that are capable of responding to Tat.