Human T cell leukemia virus type 1-associated myelopathy/tropical spastic paraparesis (HAM/TSP) is characterized by the generation of an intense CTL cell response directed against the viral transactivator protein Tax. In addition, patients diagnosed with HAM/TSP exhibit rapid activation and maturation of dendritic cells (DC), likely contributing to the robust, Tax-specific CTL response. In this study, extracellular Tax has been shown to induce maturation and functional alterations in human monocyte-derived DC, critical observations being confirmed in freshly isolated myeloid DC. Tax was shown to promote the production of proinflammatory cytokines and chemokines involved in the DC activation process in a dose- and time-dependent manner. Furthermore, Tax induced the expression of DC activation (CD40, CD80, and CD86) and maturation (CD83) markers and enhanced the T cell proliferation capability of DC. Heat inactivation of Tax resulted in abrogation of these effects, indicating a requirement for the native structure of Tax, which was found to bind efficiently to the DC membrane and was internalized within a few hours, suggesting that extracellular Tax may possess an intracellular mechanism of action subsequent to entry. Finally, inhibitors of cellular signaling pathways, NF-kappaB, protein kinase, tyrosine kinase, and phospholipase C, were shown to inhibit Tax-mediated DC activation. This is the first study reporting the immunomodulatory effects of extracellular Tax in the DC compartment. These results suggest that DC, once exposed to Tax by uptake from the extracellular environment, can undergo activation, providing constant antigen presentation and costimulation to T cells, leading to the intense T cell proliferation and inflammatory responses underlying HAM/TSP.