Human T-cell lymphotropic virus type 1 (HTLV-1) is an oncogenic retrovirus and the etiologic agent of adult T-cell leukemia (ATL), an aggressive CD4(+) malignancy. HTLV-2 is highly homologous to HTLV-1; however, infection with HTLV-2 has not been associated with lymphoproliferative diseases. Although HTLV-1 infection of CD4(+) lymphocytes induces cellular replication and transformation, infection of CD34(+) human hematopoietic progenitor cells (HPCs) strikingly results in G(0)/G(1) cell cycle arrest and suppression of in vitro clonogenic colony formation by induction of expression of the cdk inhibitor p21(cip1/waf1) (p21) and concurrent repression of survivin. Immature CD34(+)/CD38(-) hematopoietic stem cells (HSCs) were more susceptible to alterations of p21 and survivin expression as a result of HTLV-1 infection, in contrast to more mature CD34(+)/CD38(+) HPCs. Knockdown of p21 expression in HTLV-1-infected CD34(+) HPCs partially abrogated cell cycle arrest. Notably, HTLV-2, an HTLV strain that is not associated with leukemogenesis, does not significantly modulate p21 and survivin expression and does not suppress hematopoiesis from CD34(+) HPCs in vitro. We speculate that the remarkable differences in the activities displayed by CD34(+) HPCs following infection with HTLV-1 or HTLV-2 suggest that HTLV-1 uniquely exploits cell cycle arrest mechanisms to establish a latent infection in hematopoietic progenitor/hematopoietic stem cells and initiates preleukemic events in these cells, which eventually results in the manifestation of ATL.