Positive transcription elongation factor b (P-TEFb) hyperphosphorylates the carboxy-terminal domain of RNA polymerase II, permitting productive transcriptional elongation. The cyclin T1 subunit of P-TEFb engages cellular transcription factors as well as the human immunodeficiency virus type 1 (HIV-1) transactivator Tat. To identify potential P-TEFb regulators, we conducted a yeast two-hybrid screen with cyclin T1 as bait. Among the proteins isolated was the human I-mfa domain-containing protein (HIC). HIC has been reported to modulate expression from both cellular and viral promoters via its C-terminal cysteine-rich domain, which is similar to the inhibitor of MyoD family a (I-mfa) protein. We show that HIC binds cyclin T1 in yeast and mammalian cells and that it interacts with intact P-TEFb in mammalian cell extracts. The interaction involves the I-mfa domain of HIC and the regulatory histidine-rich region of cyclin T1. HIC also binds Tat via its I-mfa domain, although the sequence requirements are different. HIC colocalizes with cyclin T1 in nuclear speckle regions and with Tat in the nucleolus. Expression of the HIC cDNA modulates Tat transactivation of the HIV-1 long terminal repeat (LTR) in a cell type-specific fashion. It is mildly inhibitory in CEM cells but stimulates gene expression in HeLa, COS, and NIH 3T3 cells. The isolated I-mfa domain acts as a dominant negative inhibitor. Activation of the HIV-1 LTR by HIC in NIH 3T3 cells occurs at the RNA level and is mediated by direct interactions with P-TEFb.