A specific RNA sequence located in the leader of all human immunodeficiency virus type 1 (HIV-1) mRNAs termed the transactivation response element, or TAR, is a primary target for induction of HIV-1 long terminal repeat activity by the HIV-1-derived trans-regulatory protein, Tat. Human neurotropic virus, JC virus (JCV), a causative agent of the degenerative demyelinating disease progressive multifocal leukoencephalopathy, contains sequences in the 5' end of the late RNA species with an extensive homology to HIV-1 TAR. In this study, we examined the possible role of the JCV-derived TAR-homologous sequence in Tat-mediated activation of the JCV late promoter (Tada et al., Proc. Natl. Acad. Sci. USA 87:3479-3483, 1990). Results from site-directed mutagenesis revealed that critical G residues required for the function of HIV-1 TAR that are conserved in the JCV TAR homolog play an important role in Tat activation of the JCV promoter. In addition, in vivo competition studies suggest that shared regulatory components mediate Tat activation of the JCV late and HIV-1 long terminal repeat promoters. Furthermore, we showed that the JCV-derived TAR sequence behaves in the same way as HIV-1 TAR in response to two distinct Tat mutants, one of which that has no ability to bind to HIV-1 TAR and another that lacks transcriptional activity on a responsive promoter. These results suggest that the TAR homolog of the JCV late promoter is responsive to HIV-1 Tat induction and thus may participate in the overall activation of the JCV late promoter mediated by this transactivation.