Transcription factors of the Sp family are known to play key roles in the regulation of both constitutive as well as cell type- and differentiation stage-specific gene expression. Binding sites for factors of the Sp family (Sp1 and Sp3) have previously been identified within the U3 region of the human T-cell leukemia virus type 1 (HTLV-1) long terminal repeat (LTR). Although previous studies have demonstrated that Sp1 and Sp3 can interact with the Tax-responsive element 1 (TRE-1) repeat III, the sequences required for Sp1/Sp3 binding have not been mapped in detail. Herein, we demonstrate that the GC-rich regions flanking the viral cAMP-responsive element (CRE) within TRE-1 repeat III exhibit substantial affinity for both Sp1 and Sp3. We demonstrate that purified Sp1 competes with purified CREB for binding to TRE-1 repeat III due to the physical proximity of the Sp1/Sp3 and ATF/CREB binding sites, while purified Sp1 forms a multiprotein complex with purified CREB in the presence of Tax as demonstrated by electrophoretic mobility shift (EMS) analyses. Sp1 and Sp3 binding to the U3 region of the HTLV-1 LTR in the presence of Tax in vivo was confirmed by chromatin immunoprecipitation using HTLV-1-infected T cells (SLB-1 and C8166). Overexpression of Sp1 was modestly enhanced, while overexpression of Sp3 inhibited basal and Tax-mediated transactivation of the HTLV-1 LTR in U-937 cells (which express relatively low levels of endogenous Sp1 and Sp3). Furthermore, the modest upregulation of LTR activation caused by overexpression of Sp1 could be blocked by site-directed mutagenesis of the GC-rich Sp1/Sp3 binding sites within TRE-1 repeat III. These results suggest that both Sp1 and Sp3 transcription factor binding to TRE-1 repeat III participate in regulation of HTLV-1 viral gene expression.