Human T-cell leukemia virus type 1 (HTLV-1) encodes a transcriptional activator, Tax, whose activity is believed to contribute significantly to cellular transformation. Tax stimulates transcription from the proviral promoter as well as from promoters for a variety of cellular genes. The mechanism through which Tax communicates to the general transcription factors and RNA polymerase II has not been completely determined. We investigated whether Tax could function directly through the general transcription factors and RNA polymerase II or if other intermediary factors or coactivators were required. Our results show that a system consisting of purified recombinant TFIIA, TFIIB, TFIIE, TFIIF, CREB, and Tax, along with highly purified RNA polymerase II, affinity-purified epitope-tagged TFIID, and semipurified TFIIH, supports basal transcription of the HTLV-1 promoter but is not responsive to Tax. Two additional activities were required for Tax to stimulate transcription. We demonstrate that one of these activities is poly(ADP-ribose) polymerase (PARP), a molecule that has been previously identified to be the transcriptional coactivator PC1. PARP functions as a coactivator in our assays at molar concentrations approximately equal to those of the DNA and equal to or less than those of the transcription factors in the assay. We further demonstrate that PARP stimulates Tax-activated transcription in vivo, demonstrating that this biochemical approach has functionally identified a novel target for the retroviral transcriptional activator Tax.