NF-kappa B is a potent inducible transcription factor that regulates many genes in activated T cells. In this report we examined the ability of different subunits of NF-kappa B to enhance HIV-1 transcription in vitro with chromatin templates. We find that the p65 subunit of NF-kappa B is a strong transcriptional activator of nucleosome-assembled HIV-1 DNA, whereas p50 does not activate transcription, and that p65 activates transcription synergistically with Sp1 and distal HIV-1 enhancer-binding factors (LEF-1, Ets-1, and TFE-3). These effects were observed with chromatin, but not with nonchromatin templates. Furthermore, binding of either p50 or p65 with Sp1 induces rearrangement of the chromatin to a structure that resembles the one reported previously for integrated HIV-1 proviral DNA in vivo. These results suggest that p50 and Sp1 contribute to the establishment of the nucleosomal arrangement of the uninduced provirus in resting T cells, and that p65 activates transcription by recruitment of the RNA polymerase II transcriptional machinery to the chromatin-repressed basal promoter.