The HIV-1 Tat protein, essential for HIV-1 gene expression and viral replication, is known to be secreted by infected cells and has pleiotropic effects on various cell functions. It seems that extracellular Tat may exert its functions on cellular targets by at least two different mechanisms, namely, by adsorptive endocytosis, and by a possible interaction with cell surface receptor(s). Here we report that extracellular Tat activates AIM/CD69 gene transcription through an NF-kappaB-dependent pathway in the erythroleukemia cell line K562. Tat induces NF-kappaB binding to DNA as a result of IkappaBalpha phosphorylation and degradation, which depend on the intracellular redox state. We found that the second Tat-coding exon is required for CD69 gene trans-activation, but not for HIV LTR gene transcription. Fluorescein-labeled Tat proteins were used to study cell surface binding sites and cellular uptake of the proteins. Full-length Tat protein has specific binding sites on the surface of K562 cells, whereas truncated Tat1-48, which is efficiently internalized by the cells, does not bind to the cell surface. Our results suggest that extracellular Tat may activate a cell surface-mediated pathway that induces intracellular signal transduction in K562 cells, leading to the activation of NF-kappaB and the transcription of NF-kappaB-dependent genes, such as CD69.