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During acute human immunodeficiency virus type 1 (HIV-1) infection or after transfection of the tat gene, Tat protein is released into the cell culture supernatant. In this extracellular form, Tat stimulates both HIV-1 gene expression and the growth of cells derived from Kaposi's sarcoma (KS) lesions of HIV-1-infected individuals (AIDS-KS cells). Tat protein and its biological activities appear in the cell supernatants at the peak of Tat expression, when the rate of cell death is low (infection) or cell death is undetectable (transfection) and increased levels of cytoplasmic Tat are present. Tat-containing supernatants stimulate maximal AIDS-KS cell growth but only low to moderate levels of HIV-1 gene expression. This is due to the different concentrations of exogenous Tat required for the two effects. The cell growth-promoting effects of Tat peak at between 0.1 and 1 ng of purified recombinant protein per ml in the cell growth medium and do not increase with concentration. In contrast, both the detection of nuclear-localized Tat taken up by cells and the induction of HIV-1 gene expression or replication require higher Tat concentrations (> or = 100 ng/ml), and all increase linearly with increasing amounts of the exogenous protein. These data suggest that Tat can be released by a mechanism(s) other than cell death and that the cell growth-promoting activity and the virus-transactivating effect of extracellular Tat are mediated by different pathways.