Tat, the human immunodeficiency virus (HIV)-encoded transcription factor, is vital for HIV replication and transcription. Any drug that inhibits Tat's activity is a valuable candidate for chemotherapeutic applications. We show here that doxorubicin (Dox), a well-known anticancer drug and its derivative, daunomycin, inhibit the ability of Tat to activate the HIV-1 LTR. We contransfected HeLa cells with pSV40TAT and a chloramphenicol acetyltransferase gene driven by an HIV LTR promoter. CAT transcription was vigorously stimulated many fold by Tat production but the effect of Tat was inhibited by Dox in a dose-dependent manner. The transcriptional activation domain of Tat, located in its 67 amino terminal residues, remains Dox sensitive. A TAR-deleted reporter gene with a Gal binding domain is transactivated by a Gal-Tat fusion protein. This transcription complex retains a high level of activity in the presence of Dox, suggesting that Dox primarily affects RNA-Tat, rather than DNA-Tat, mediated transactivation. RNA gel mobility analysis reveals that Dox does not affect the binding of Tat to TAR-RNA in vitro but does increase the binding activity of cellular nuclear proteins with TAR-RNA. Induction or activation of such TAR-binding proteins in cells that might interfere with the activity of Tat could explain the observed inhibitory effects of Dox on Tat-activated transcription. These results suggest that Dox may have chemotherapeutic effects on HIV expression mediated through TAR RNA.