The Rex protein of human T-cell leukemia virus types I (HTLV-I) and II (HTLV-II) regulates the expression of the viral structural genes and is critical for viral replication. Rex acts by specifically binding to RNAs containing sequences of the R region of the 5' long terminal repeat. Two forms of Rex detected in HTLV-II-infected cells, p26rex and p24rex, differ in the extent of serine phosphorylation. Two-dimensional phosphopeptide analysis indicates that p26rex is extensively phosphorylated at multiple sites. Using a sensitive immunobinding assay, we show that the phosphorylation state of Rex determines the efficiency of binding of Rex to HTLV-II target RNAs. Thus, the phosphorylation state of Rex in the infected cell may be a switch that determines whether virus exists in a latent or productive state. These studies also suggest that phosphorylation of RNA-binding regulatory proteins is a more general mechanism of gene regulation.