In familial neurofibromatosis type 1 (NF1), individuals with a germ line-transmitted NF1 mutation develop multiple neurofibromas. To explain the observation that transgenic mice expressing the human T-lymphotropic virus type 1 (HTLV-1) tax gene under the control of the viral regulatory element also develop multiple neurofibromas, we demonstrate that the Tax trans-regulator can functionally repress NF1 gene expression through a cis-acting element located immediately upstream of its transcriptional start site, thereby allowing the development of benign neurofibromas without the need for direct mutations in NF1. We propose that such a mechanism would suffice to epigenetically alter NF1 gene expression. The fact that transgenic animals have localized rather than diffuse neurofibroma formation, however, suggests that additional genetic or epigenetic events may be required for neurofibroma formation.