The human immunodeficiency virus type 1 (HIV-1) Tat protein enhances reverse transcription, but it is not known whether Tat acts directly on the reverse transcription complex or through indirect mechanisms. Since processing of Tat by HIV protease (PR) might mask its presence and, at least in part, explain this lack of data, we asked whether Tat can be cleaved by PR. We used a rabbit reticulocyte lysate (RRL) system to make Tat and PR. HIV-1 PR is expressed as a Gag-Pol fusion protein, and a PR-inactivated Gag-Pol is also expressed as a control. We showed that Tat is specifically cleaved in the presence of PR, producing a protein of approximately 5 kDa. This result suggested that the cleavage site was located in or near the Tat basic domain (amino acids 49 to 57), which we have previously shown to be important in reverse transcription. We created a panel of alanine-scanning mutations from amino acids 45 to 54 in Tat and evaluated functional parameters, including transactivation, reverse transcription, and cleavage by HIV-1 PR. We showed that amino acids 49 to 52 (RKKR) are absolutely required for Tat function in reverse transcription, that mutation of this domain blocks cleavage by HIV-1 PR, and that other pairwise mutations in this region modulate reverse transcription and proteolysis in strikingly similar degrees. Mutation of Tat Y47G48 to AA also down-regulated Tat-stimulated reverse transcription but had little effect on transactivation or proteolysis by HIV PR, suggesting that Y47 is critical for reverse transcription. We altered the tat gene of the laboratory strain NL4-3 to Y47D and Y47N so that overlapping reading frames were not affected and showed that Y47D greatly diminished virus replication and conveyed a reverse transcription defect. We hypothesize that a novel, cleaved form of Tat is present in the virion and that it requires Y47 for its role in support of efficient reverse transcription.