HIV-1 transcription from the LTR promoter is activated by the viral Tat protein through interaction with the nascent TAR RNA hairpin structure. The mechanism of Tat-mediated transcriptional activation has been extensively investigated with LTR-CAT reporter genes in transient transfections and, more recently, in infection experiments with mutant HIV-1 variants. Several discrepancies between these two assay systems have been reported. For instance, whereas opening of the lower part of the TAR RNA stem does not affect the promoter activity of an LTR-CAT plasmid in transient assays, the corresponding virus mutant is fully replication-impaired. With the aim to resolve this controversy, we have examined the activity of a set of TAR RNA mutants in transient transfection experiments with a variety of cell types. We now demonstrate that truncated TAR motifs exhibit a severe, but cell-type dependent transcription defect. Whereas full LTR activity is measured in COS cells that have been used regularly in previous transfection assays, a severe defect is apparent in a variety of human cell lines, including T cell lines that are typically used in HIV-1 replication studies. These results suggest the presence of a human protein that participates in Tat-mediated transcriptional activation through binding to the lower part of the TAR stem. Several candidate co-factors have been reported in literature. This study resolves the discrepancy between transfection and infection studies on the requirements of the lower TAR stem structure. The evidence also implies that LTR transcription studies should be performed preferentially in human cell types.