Human T-cell leukemia virus type 1 (HTLV-1) and HTLV-2 are complex retroviruses that persist in the host, eventually causing leukemia and neurological disease in a small percentage of infected individuals. In addition to structural and enzymatic proteins, HTLV encodes regulatory (Tax and Rex) and accessory (open reading frame I and II) proteins. The viral Tax and Rex proteins positively regulate virus production. Tax activates viral and cellular transcription to promote T-cell growth and, ultimately, malignant transformation. Rex acts posttranscriptionally to facilitate cytoplasmic expression of viral mRNAs that encode the structural and enzymatic gene products, thus positively controlling virion expression. Here, we report that both HTLV-1 and HTLV-2 have evolved accessory genes to encode proteins that act as negative regulators of both Tax and Rex. HTLV-1 p30(II) and the related HTLV-2 p28(II) inhibit virion production by binding to and retaining tax/rex mRNA in the nucleus. Reduction of viral replication in a cell carrying the provirus may allow escape from immune recognition in an infected individual. These data are consistent with the critical role of these proteins in viral persistence and pathogenesis in animal models of HTLV-1 and HTLV-2 infection.