Human T-cell leukemia virus type 1 Tax protein, a transcriptional activator of viral expression, promotes uncontrolled cellular proliferation. In this report, we show that Tax-expressing myoblasts do not exit the cell cycle and fail to differentiate into myotubes despite the deprivation of serum. In these cells, which displayed unchanged levels of the ubiquitous basic helix-loop-helix E2A factors and Id proteins, Tax was found to target the muscle-specific basic helix-loop-helix transcription factor MyoD. The Tax-induced increase in cyclin-dependent kinase 2 activity correlated with the phosphorylation of MyoD. However, the half-life of this hyperphosphorylated form of MyoD increased in Tax-expressing myoblasts, contrary to that in control cells. Furthermore, MyoD mRNA levels were reduced in Tax-expressing cells. Tax was found to repress MyoD expression at the transcriptional step by preventing MyoD from activating its own transcription. Interestingly, overexpression of the transcriptional coactivator p300 restored the capacity of Tax-expressing muscle cells to differentiate. These observations underscore the critical effect of the trans-repressing ability of Tax on the MyoD-controlled proliferation and differentiation processes of the myoblast lineage.