The human T-cell leukemia virus type I tax1 gene product is responsible for the increased expression of several cytokine and cellular genes that contain NF-kappa B regulatory sequences. Our laboratory has previously demonstrated that purified, extracellular Tax1 protein induced the nuclear accumulation of NF-kappa B binding activity in lymphoid cells. Since HTLV-I infection causes increased levels of lymphotoxin tumor necrosis factor-beta [TNF-beta] and immunoglobulin secretion, we have studied the interaction of NF-kappa B proteins from Tax1-stimulated cells with the TNF-beta and immunoglobulin kappa (Ig kappa) light chain genes. Tax1 induction of NF-kappa B occurred in the presence of cycloheximide, and Tax1 stimulation did not result in increased levels of NF-kappa B or c-rel RNA. These results indicate that new synthesis of NF-kappa B proteins was not required for induction of NF-kappa B-binding activity. With use of the Ig kappa NF-kappa B-binding site as a probe, two distinct NF-kappa B gel shift complexes were induced by the Tax1 protein. A slower-migrating complex, C1, was inhibited by the addition of purified I kappa B. In contrast, the faster-migrating C2 complex was not inhibited by I kappa B, but C2 was increased by detergent treatment of cytoplasmic extracts, suggesting that its binding activity was also regulated by an inhibitor. The Tax1-stimulated proteins that interacted with the NF-kappa B-binding sites in the Ig kappa and TNF-beta promoters were distinct. A 75-kDa protein preferentially associated with the Ig kappa NF-kappa B-binding site. In contrast, a 59-kDa protein associated with the TNF-beta NF-kappa B-binding site. Tax1 stimulation led to increased levels of TNF-beta and Ig kappa mRNA, as measured by reverse transcription and polymerase chain reaction analysis. These results represent the first experimental evidence that extracellular Tax1 can regulate the expression of endogenous cellular genes.