Examination of the interaction between human immunodeficiency virus (HIV) regulatory gene products and the host immune system is fundamental to understanding the pathogenesis of HIV and could reveal possible targets for therapeutic intervention in the treatment of AIDS. The HIV Tat gene is a potential candidate for this type of strategy. Transgenic mice can be used to investigate the in vivo effects of Tat on the developing and dynamic immune system and on cellular gene expression. Thus, we have generated transgenic mice that harbor the HIV type 1 Tat gene under the transcriptional control of the human CD2 gene regulatory elements. This expression cassette results in high-level, tissue-specific transcription of the transgene within the T-cell compartment. In this report, we demonstrate the effects of Tat on the in vivo immune system. CD2-Tat transgenic mice show no signs of aberrant thymic development and have normal levels of T-cell subsets in the thymus and peripheral lymphoid organs. However, activated T cells from transgenic mice contain increased levels of tumor necrosis factor beta mRNA as well as biologically active tumor necrosis factor protein and express elevated levels of transforming growth factor beta and interleukin-4 receptor mRNA. These increased cytokine levels do not appear to alter mitogen- or antigen-stimulated responses or induce the formation of dermal lesions in ageing mice. Such investigations should provide insight into the combination of host immune factors mediating pathogenesis in HIV infection.