The chemoattractant protein 1 (MCP-1) is one of the most potent monocyte chemoattractants whose level is elevated during the course of AIDS dementia. Earlier studies showed that HIV-1 Tat protein is able to induce transcription of the MCP-1 promoter in astrocytic cells. Furthermore, the TGFbeta-1 signaling pathway through its regulatory proteins, Smads, modulates Tat activation of MCP-1. Here, we demonstrate that C/EBPbeta, whose activity is enhanced by a variety of cytokines during the course of viral infection, can stimulate basal- and Tat-mediated transcription of MCP-1 in human astrocytic cells. Results using promoter deletion mutants suggested the importance of multiple C/EBPbeta binding sites scattered within -200 to +1 of the MCP-1 promoter in the observed activity. Results from DNA binding studies have shown that the interaction of C/EBPbeta with its DNA motif is diminished by the C/EBPbeta homologous protein, CHOP, which possesses the ability to suppress the stimulatory effect of C/EBPbeta on MCP-1 transcription. Tat, which possesses the ability to interact with C/EBPbeta, alleviates the negative effect of CHOP and restores C/EBPbeta interaction with the DNA. Furthermore, Smad3 and its C-terminal regulatory motif, MH2, interact with C/EBPbeta and modulate its DNA binding and transcriptional activity on the MCP-1 promoter. Our results show that the physical and functional interactions of C/EBPbeta and Tat are severely affected by the presence of Smad3 and MH2. Altogether, these observations identify C/EBPbeta as a new partner for Tat in stimulating MCP-1 transcription in astrocytes and suggest that the delicate balance among the downstream regulatory proteins of several cytokines and immunomodulators can dictate the level of expression of chemoattractants, including MCP-1. Hence, inappropriate expression and function of regulatory proteins such as C/EBPbeta and Smads by Tat may induce MCP-1 production in astrocytes and contribute to the neuropathogenesis of AIDS through stimulation of inflammation in the CNS.