JC virus (JCV) is the aetiological agent of progressive multifocal leukoencephalopathy (PML), a fatal, demyelinating disease of the brain affecting people with AIDS. Although immunosuppression is involved in infection of the brain by JCV, a direct influence of human immunodeficiency virus type 1 (HIV-1) has also been established. The Tat protein of HIV-1 has been implicated in activation of the cytokine transforming growth factor (TGF)-beta in HIV-1-infected cells and in stimulating JCV gene transcription and DNA replication in oligodendroglia, the primary central nervous system cell type infected by JCV in PML. This study demonstrated that Tat can cooperate with SMAD proteins, the intracellular effectors of TGF-beta, at the JCV DNA control region (CR) to stimulate JCV gene transcription. Tat stimulated JCV early gene transcription in KG-1 oligodendroglial cells when expressed via transfection or added exogenously. Using chromatin immunoprecipitation, it was shown that exogenous Tat enhanced binding of SMAD2, -3 and -4 and their binding partner Fast1 to the JCV CR in living cells. When SMAD2, -3 and -4 were expressed together, Tat, expressed from plasmid pTat, stimulated transcription from both early and late gene promoters, with the early promoter exhibiting stimulation of >100-fold. Tat, SMAD4 and JCV large T-antigen were all visualized in oligodendroglial cells at the border of an active PML lesion in the cerebral frontal lobe. These results revealed a positive reinforcement system in which the SMAD mediators of the TGF-beta system act cooperatively with Tat to stimulate JCV gene transcription.