Human immunodeficiency virus (HIV)-encoded trans-activator (Tat) acts through the trans-activation response element RNA stem-loop to increase greatly the processivity of RNA polymerase II. Without Tat, transcription originating from the HIV promoter is attenuated. In this study, we demonstrate that transcriptional activation by Tat in vivo and in vitro requires the C-terminal domain (CTD) of RNA polymerase II. In contrast, the CTD is not required for basal transcription and for the formation of short, attenuated transcripts. Thus, trans-activation by Tat resembles enhancer-dependent activation of transcription. These results suggest that effects of Tat on the processivity of RNA polymerase II require proteins that are associated with the CTD and may result in the phosphorylation of the CTD.