The HIV-1 transactivating factor Tat plays critical roles in the pathogenesis of AIDS. Originally discovered as a potent activator of viral replication, Tat has now been found to be involved in the regulation of both viral and cellular gene expression. Due to its structure, Tat protein can be secreted by infected cells, and can penetrate neighboring uninfected cells, altering their function in the absence of viral replication. Indeed, increasing number of reports suggest a multifunctional effect of Tat, which depends on cell type and the degree of cellular maturation. Here, we discuss intracellular activities of Tat in HIV-infected cells, as well as in cells exposed to Tat, and focus on two contradictory aspects of Tat-mediated effects: cell proliferation and cell death.