The mechanism of human T-cell leukemia virus (HTLV)-mediated transformation and induction of malignancy is unknown; however, several studies have implicated the viral gene product, Tax. Conclusive evidence for the role of Tax in the HTLV malignant process has been impeded by the inability to mutate tax in the context of an infectious virus and dissociate viral replication from cellular transformation. To circumvent this problem we constructed a mutant of HTLV type 2 (HTLV-2) that replicates by a Tax-independent mechanism. For these studies, the Tax response element in the viral long terminal repeat was replaced with the cytomegalovirus immediate-early promoter enhancer (C-enh). Transcription of the chimeric HTLV-2 (HTLVC-enh) was efficiently directed by this heterologous promoter. Also, the chimeric virus transformed primary human T lymphocytes with an efficiency similar to that of wild-type HTLV-2. A tax-knockout virus, termed HTLVC-enhDeltaTax, was constructed to directly assess the importance of Tax in cellular transformation. Transfection and infection studies indicated that HTLVC-enhDeltaTax was replication competent; however, HTLVC-enhDeltaTax failed to transform primary human T lymphocytes. We conclude that Tax is essential for HTLV-mediated transformation of human T lymphocytes. Furthermore, this chimeric HTLV, that replicates in the absence of Tax, should facilitate studies to determine the precise mechanism of T-lymphocyte transformation by HTLV.