The interferon (IFN)-induced, dsRNA-dependent serine/threonine protein kinase, PKR, plays a key regulatory role in the IFN-mediated anti-viral response by blocking translation in the infected cell via the phosphorylation of the alpha subunit of elongation factor 2 (eIF2). The human immunodeficiency vims type 1 (HIV-1) evades the anti-viral IFN response through the binding of one of its major transcriptional regulatory proteins. Tat, to PKR. HIV-l Tat acts as a substrate homologue for the enzyme, competing with eIF2cx, and thus inhibiting the translational block. It has been shown that during the interaction with PKR, Tat becomes phosphorylated. This work investigated the effect of this phosphorylation on the role of Tat in viral transcription. HIV-1 Tat activates transcription elongation by first binding to TAR RNA, a stem-loop structure found at the 5' end of all viral transcripts. Results presented here show that when Tat is phosphorylated by PKR, it binds more strongly, to more TAR RNA, than when it is not phosphorylated. It has been reported that phosphorylation of HIV-l Tat by PKR takes place on three residues: serine 62 (S62), threonine 64 (T64), and serine 68 (S68). Various combinations of mutations of all three residues have been generated and the mutant Tat proteins have been expressed and purified. Results of phosphorylation experiments of these mutant proteins with PKR appear to suggest cooperation between some of these residues during the phosphorylation process, and a possible central role for S68. Data from in vitro transcription assays suggest that phosphorylation of Tat by PKR increases transactivation from the HIV-l LTR. More significantly, in vivo experiments with mammalian expression constructs of the Tat phosphorylation mutants and of wild-type Tat, show a 4-fold decrease in transcription from the HIV-1 LTR with non-phosphorylated Tat, and also confirm a possible central role for S68.