Bovine leukemia virus (BLV) is associated with enzootic bovine leukosis and is closely related to human T-cell leukemia virus type 1 (HTLV-1). The Tax protein of BLV acts through the 5' long terminal repeat (LTR) of BLV and activates the transcription of BLV. In this study, we amplified tax genes from BLV-infected cattle using PCR. We cloned the genes and monitored the transcriptional activities of the products. Seven independent mutant Tax proteins, with at least one amino acid substitution between residues 240 and 265, exhibited a markedly stronger ability to stimulate the viral LTR-directed transcription than the wild-type Tax protein. Analysis of chimeric Tax proteins derived from wild-type and mutant Tax proteins clearly demonstrated that a single substitution between residue 240 and 265 might be critical for the higher activities of the Tax mutant proteins. Furthermore, it appeared that transient expression of a Tax mutant protein was better able to increase the production of viral proteins and particles from a defective recombinant proviral clone of BLV than was wild-type Tax. Analysis of mutations within the U3 region of the LTR revealed that a cyclic AMP-responsive element in Tax-responsive element 2 might be sufficient for the enhanced activation mediated by the mutant proteins. In addition to the LTR of BLV, other viral enhancers, such as the enhancers of HTLV-1 and of mouse mammary tumor virus, which cannot be activated by wild-type BLV Tax protein, were activated by a Tax mutant protein. Our observations suggest that the transactivation activity and target sequence specificity of BLV Tax might be limited or negatively regulated by the region of the protein between amino acids 240 and 265.