The tax gene product of the type I human T-cell leukemia virus (HTLV-I) transactivates interleukin-2 (IL-2) gene through activation of an enhancer termed CD28 responsive element (CD28RE). Tax activation of the CD28RE is partially mediated by a member of the nuclear factor of activated T cells, NF-AT1. We have previously shown that NF-AT1 is constitutively active in Jurkat T cells stably transfected with the Tax cDNA, although the underlying molecular mechanism and physiological relevance of this finding remain unclear. In this report, we demonstrate that the active form of NF-AT1 is also present in the nuclei of HTLV-I-transformed T cells that express the Tax protein. Interestingly, the constitutive activation of NF-AT1 in these T cells is associated with its dephosphorylation. Furthermore, the dephosphorylated NF-AT1 can be rapidly rephosphorylated when the cells are incubated with cyclosporin A, an immunosuppressant inhibiting the serine/threonine phosphatase calcineurin. These results suggest that activation of NF-AT1 in Tax-expressing and HTLV-I-transformed T cells results from its dephosphorylation, which in turn may be due to deregulation of calcineurin.