Skin disorders are frequently seen in patients with the acquired immune deficiency syndrome (AIDS). Since many of these cutaneous manifestations are accompanied by an early onset of epidermal hyperplasia, the keratinocyte is a candidate for infection by the human immunodeficiency virus (HIV). We now report that the HIV tat gene, under the control of the viral long terminal repeat (LTR), can efficiently transform human keratinocytes in culture. Our finding suggests that this activity of the tat gene may be responsible for the epidermal hyperplasia that accompanies psoriasis and precedes the development of squamous cell and basal cell carcinomas in AIDS patients.