Human immunodeficiency virus (HIV)-encoded transactivator Tat is essential for viral gene expression and replication. By interacting with a nascent RNA stem-loop called the trans-acting responsive region (TAR). Tat increases rates of initiation and/or elongation of HIV transcription. Several reports have also suggested that Tat has additional effects on mature HIV RNA species including modification of primary transcripts in the nucleus and their increased translation in the cytoplasm. These posttranscriptional effects are most pronounced in the Xenopus oocyte. To investigate directly whether Tat has similar effects on viral transcripts in cells that are permissive for HIV replication, we cotransfected and microinjected human and monkey cells with Tat and TAR in the form of DNA or RNA. Whereas Tat transactivated TAR DNA targets, it did not transactivate TAR RNA targets in the nucleus of microinjected cells or in the cytoplasm of transfected cells. We conclude that in cells permissive for viral replication, Tat exerts its effect primarily at the level of HIV transcription.