Human T-cell leukemia virus type I (HTLV-I) is an oncogenic retrovirus that causes adult T-cell leukemia/lymphoma (ATLL). The virus encodes an oncoprotein, Tax, which functions in transcriptional regulation, cell cycle control, and transformation. Through its pleiotropic actions, Tax plays critical roles in leukemogenesis. We have previously reported that PTEN and SHIP-1, PIP3 inositol phosphatases that negatively regulate the phosphatidylinositol (PI) 3-kinase signaling cascade, are disrupted in ATLL neoplasias. Overactivation of PI3-kinase signaling has an essential role in both development of ATLL-specific nuclear polymorphisms and onset of ATLL. We report here that both PTEN and SHIP-1 are down-regulated by HTLV-I Tax through the NF-kappaB signaling pathway. Tax expression up-regulated phosphorylated Akt, a downstream serine/threonine kinase in the PI3-kinase signaling cascade. Transduction of NF-kappaB p65, which mimics the activation of NF-kappaB signaling, also suppressed these phosphatases. An IkappaBDeltaN mutant that inhibits the activation of NF-kappaB prevented PIP3 phosphatase down-regulation by Tax. The underlying mechanism of NF-kappaB-mediated suppression of PIP3 phosphatases involved sequestration of the coactivator p300 by p65. These down-regulations of PIP3 phosphatases were found to be essential for the Tax-induced cell proliferation. Thus, our results suggest that HTLV-I Tax down-regulates PIP3 phosphatases through the NF-kappaB pathway, resulting in increased activation of the PI3-kinase signaling cascade in human T-cells and contributing to leukemogenesis.