The trans-acting transcriptional factor p40tax of human T-cell leukemia virus type I (HTLV-I) can activate expression not only of its own viral genes but also of other viral and cellular genes. We examined the cis-acting sequences in the simian virus 40 (SV40) enhancer required for its activation by HTLV-I p40tax. Experiments with chloramphenicol acetyltransferase constructs bearing the SV40 enhancer elements revealed that p40tax-dependent transactivation of the SV40 enhancer is mediated through the C element that contains the typical sequence for binding of a nuclear factor NF-kappa B. Activation of the C element by p40tax was seen in a limited set of cell lines as was also seen with the whole enhancer of SV40. Binding of NF-kappa B or NF-kappa B-like factor to the SV40 C element increased when p40tax was expressed. The fact that HTLV-I p40tax utilizes a cellular regulatory mechanism to transactivate the SV40 enhancer in a cell-dependent manner may have implications for the pathogenesis of adult T-cell leukemia.