The long terminal repeat (LTR) of the human immunodeficiency virus (HIV) contains the viral promoter, which is responsible for viral gene expression in eukaryotic cells. We have demonstrated that HIV LTR can also function as a promoter in Escherichia coli. A recombinant plasmid containing the HIV LTR linked to the chloramphenicol acetyltransferase gene can express the enzyme efficiently upon transformation into bacteria. Mung bean nuclease analysis mapped the bacterial transcriptional start site of the promoter to the U3 region of the LTR, in contrast to transcription in eukaryotic cells, which initiates in the U3-R boundary of the LTR. The HIV LTR, besides being fully functional in E. coli, can also be specifically trans-activated by the HIV tat gene product. Trans-activation is demonstrated by an increase in chloramphenicol acetyltransferase activity as well as an increase in the mRNA level of the enzyme. This trans-activation of HIV LTR by tat protein in bacteria offers a useful system to investigate further the specific interaction between tat protein with HIV LTR and the mechanisms of trans-activation.