Human T-cell leukemia virus type 1 (HTLV-1) has two trans-acting regulator genes, tax and rex, in the pX region. The tax gene is a trans-acting transcriptional activator of the long terminal repeat (LTR) and also of the cellular gene for IL-2R alpha. The latter seems to explain initiation of abnormal growth of HTLV-1 infected cells. The rex gene is a posttranscriptional regulator accumulating gag and env mRNA and also indirectly suppressing the transcription. The regulation requires two cis-acting elements, the LTR sequence at the 3' terminus and 5' splice signal, suggesting a novel mechanism of RNA processing in the nucleus. These two trans-activator genes are essential for efficient replication of HTLV-1 and also explain its poor replication competence and tendency to be latent in vivo.