In HIV-1-infected asymptomatic carriers, the vast majority of infected cells in PBMCs are believed to be latently or nonproductively infected. We have isolated a subclone (MOLT-20-2) from an infected T cell line that expressed HIV-1 Ags at a very low level. However, viral Ag expression was markedly up-regulated by stimulation with either TNF-alpha, A23187, or PMA, indicating that the subclone might provide a suitable model of HIV-1 latency. Our previous studies have shown that the carboxyl-terminal region of the extracellular form of HIV-1 Nef played an important role in the interaction of infected cells with uninfected T cells, and could induce the cytostatic state. This suggested that Nef might contribute to intracellular signal transduction through an interaction with latently infected cells. We show in this study that stimulation of MOLT-20-2 with soluble Nef leads to HIV-1 activation from latency in a dose-dependent manner. Moreover, using a total of 14 overlapping Nef-related synthetic peptides, stimulatory activity was mapped to a discrete peptide (amino acid residues 132-147) that had the potential to activate latent HIV-1. This novel Nef function was confirmed by activation of virus production from the PBMCs of asymptomatic carriers. In addition, Nef-dependent HIV-1 activation from latency was also observed in another independently derived, latently infected cell line, U1, though not in cell line ACH-2. These results extend the significance of the Nef activity in vivo to the regulation of productive HIV-1 infection from latency, and define the regions of the protein involved.