HIV-1 transactivator of transcription (Tat) protein is required for HIV-1 replication, and it has been implicated in the pathogenesis of HIV-1-associated neurocognitive disorder (HAND). HIV-1 Tat can enter cells via receptor-mediated endocytosis where it can reside in endolysosomes; upon its escape from these acidic organelles, HIV-1 Tat can enter the cytosol and nucleus where it activates the HIV-1 LTR promoter. Although it is known that HIV-1 replication is affected by the iron status of people living with HIV-1 (PLWH), very little is known about how iron affects HIV-1 Tat activation of the HIV-1 LTR promoter. Because HIV-1 proteins de-acidify endolysosomes and endolysosome de-acidification affects subcellular levels and actions of iron, we tested the hypothesis that the endolysosome pool of iron is sufficient to affect Tat-induced HIV-1 LTR transactivation. Ferric (Fe3+) and ferrous (Fe2+) iron both restricted Tat-mediated HIV-1 LTR transactivation. Chelation of endolysosome iron with deferoxamine (DFO) and 2-2 bipyridyl, but not chelation of cytosolic iron with deferiprone and deferasirox, significantly enhanced Tat-mediated HIV-1 LTR transactivation. In the presence of iron, HIV-1 Tat increasingly oligomerized and DFO prevented the oligomerization. DFO also reduced protein expression levels of the HIV-1 restriction agent beta-catenin in the cytosol and nucleus. These findings suggest that DFO increases HIV-1 LTR transactivation by increasing levels of the more active dimeric form of Tat relative to the less active oligomerized form of Tat, increasing the escape of dimeric Tat from endolysosomes, and/or reducing beta-catenin protein expression levels. Thus, intracellular iron might play a significant role in regulating HIV-1 replication, and these findings raise cautionary notes for chelation therapies in PLWH.