HTLV-I has been identified as the etiologic agent of neoplasia within the human peripheral blood T lymphocyte population, and a progressive neurologic disorder based primarily within the central nervous system. We have examined the role of HTLV-I in these two distinctly different clinical syndromes by examining the life cycle of the virus, with emphasis on the regulation of viral gene expression within relevant target cell populations. In particular, we have examined the impact of specific viral gene products, particularly Tax, on cellular metabolic function. Tax is a highly promiscuous and pleiotropic viral oncoprotein, and is the most important factor contributing to the initial stages of viral-mediated transformation of T cells after HTLV-I infection. Tax, which weakly binds to Tax response element 1 (TRE-1) in the viral long terminal repeat (LTR), can dramatically trans-activate viral gene expression by interacting with cellular transcription factors, such as activated transcription factors and cyclic AMP response element binding proteins (ATF/CREB), CREB binding protein (CBP/p300), and factors involved with the basic transcription apparatus. At the same time, Tax alters cellular gene expression by directly or indirectly interacting with a variety of cellular transcription factors, cell cycle control elements, and cellular signal transduction molecules ultimately resulting in dysregulated cell proliferation. The mechanisms associated with HTLV-I infection, leading to tropical spastic paraparesis (TSP) are not as clearly resolved. Possible explanations of viral-induced neurologic disease range from central nervous system (CNS) damage caused by direct viral invasion of the CNS to bystander CNS damage caused by the immune response to HTLV-I infection. It is interesting to note that it is very rare for an HTLV-I infected individual to develop both adult T cell leukemia (ATL) and TSP in his/her life time, suggesting that the mechanisms governing development of these two diseases are mutually exclusive.