Equine infectious anemia virus (EIAV) activates transcription via a Tat protein, a TAR element, and the equine elongation factor positive transcription elongation factor b (P-TEFb). In human cells, EIAV Tat (eTat) can inhibit the ability of human immunodeficiency virus type 1 (HIV-1) Tat (hTat) to activate transcription from the HIV-1 long terminal repeat, demonstrating that EIAV Tat can interact nonproductively with human P-TEFb. To study the mechanism of EIAV Tat and HIV-1 Tat activation, we developed an in vitro elongation assay that recapitulates EIAV Tat-mediated inhibition of HIV-1 Tat trans-activation. We found that eTat specifically inhibits activation of elongation by HIV-1 Tat while having no effect on basal transcription elongation. The competitive inhibition of hTat activation was reversed by an activity present in HeLa cell nuclear extracts, most likely a form of P-TEFb. Recombinant P-TEFb (cyclin T1 and CDK9) overcame the inhibition of transcription by eTat but in a nonspecific manner. EIAV Tat affinity chromatography was used to purify the activity present in nuclear extract that was capable of reversing eTat inhibition. We characterized the protein components of this activity, which include cyclin T1, CDK9, Tat-SF1, and at least three unidentified proteins. These data suggest that additional factors are involved in the mechanism of Tat activation. (C) 2000 Academic Press.