Efficient expression of the human immunodeficiency virus (HIV) genome requires the viral-encoded transactivator Tat. Tat interacts with the highly structured trans-activation-response (TAR) RNA that is found at the 5' end of all viral transcripts, and mediates the formation of transcription complexes that are capable of elongation through the entire length of the viral genome. By placing TAR immediately downstream from the P2 promoter of the mouse c-myc gene, we have previously shown that Tat can also direct transcriptional elongation through potential sites of premature termination within c-myc in transfected HeLa cells. We now demonstrate that Tat can activate c-myc transcription when TAR is positioned internally within the c-myc transcript at distances up to 353 nt downstream from the P2 promoter. We show that Tat can also activate transcription from the c-myc P1 promoter, which is located 165 nt upstream from P2 in these hybrid gene constructs. These novel findings show that Tat can activate transcription in vivo when TAR is positioned at distances up to 518 nt downstream from the site of transcriptional initiation. The ability of TAR to mediate Tat-activated transcription over distances greater than previously appreciated has important implications for the mechanism of action of Tat. (C) 1996 Academic Press Limited