The p12(I) protein, encoded by the pX open reading frame I of the human T-lymphotropic virus type 1 (HTLV-1), is a hydrophobic protein that localizes to the endoplasmic reticulum and the Golgi. Although p12(I) contains 4 minimal proline-rich, src homology 3-binding motifs (PXXP), a characteristic commonly found in proteins involved in signaling pathways, it has not been known whether p12(I) has a role in modulating intracellular signaling pathways. This study demonstrated that p12(I) binds to the cytoplasmic domain of the interleukin-2 receptor (IL-2R) beta chain that is involved in the recruitment of the Jak1 and Jak3 kinases. As a result of this interaction, p12(I) increases signal transducers and activators of transcription 5 (STAT5) DNA binding and transcriptional activity and this effect depends on the presence of both IL-2R beta and gamma(c) chains and Jak3. Transduction of primary human peripheral blood mononuclear cells (PBMCs) with a human immunodeficiency virus type 1-based retroviral vector expressing p12(I) also resulted in increased STAT5 phosphorylation and DNA binding. However, p12(I) could increase proliferation of human PBMCs only after stimulation of T-cell receptors by treatment of cells with low concentrations of alphaCD3 and alphaCD28 antibodies. In addition, the proliferative advantage of p12(I)-transduced PBMCs was evident mainly at low concentrations of IL-2. Together, these data indicate that p12(I) may confer a proliferative advantage on HTLV-1-infected cells in the presence of suboptimal antigen stimulation and that this event may account for the clonal proliferation of infected T cells in vivo. (Blood. 2001;98:823-829)