We have previously proposed that cAMP-responsive element-binding protein (CREB) activity is stimulated by human T-cell lymphotropic virus-1 (HTLV-1) Tax through two mechanisms that are differentially dependent upon CREB phosphorylation. We have tested this model by examining how Tax affects transcriptional activation mediated by the cAMP-responsive element (CRE) modulator (CREM). The CREM proteins are highly homologous to CREB, particularly in their DNA-binding domains and the kinase-inducible domain (KID), a region that interacts with the coactivator CREB-binding protein (CBP) in a phosphorylation-dependent manner. Despite this similarity, most CREM isoforms are transcriptional repressors. CREMalpha lacks the glutamine-rich domains found in CREB that are essential for transcriptional activation. We show that the normally repressive CREMalpha activates the HTLV-1 and cellular CREs in the presence of Tax; activation of the viral element is phosphorylation-independent, and activation of the cellular CRE is phosphorylation-dependent. CREMDelta(C-G) lacks both the KID and the glutamine-rich regions. This isoform activates the HTLV-1 long terminal repeat in a phosphorylation-independent manner, but does not activate the cellular CRE. This study suggests that Tax, interacting with the basic/zipper region of CREM, recruits CBP to the viral promoter. Tax activation of the cellular CRE depends on the KID and its ability to interact with CBP in a phosphorylation-dependent manner.