OBJECTIVE To evaluate the role of liver cells in and the effect of tumor necrosis factor-alpha (TNF-alpha) on HIV-1 replication. METHODS Human hepatoblastoma HepG2 cells were infected with various strains of HIV-1 and the effect of TNF-alpha treatment, either before or after infection, was monitored by p24 antigen assays. Northern blot analysis and gel retardation assays were performed to determine the expression of CD4 and HIV-1 trans-acting region (TAR)-binding proteins in these cells, respectively. RESULTS HepG2 cells are CD4+ and support active HIV-1 replication, producing infectious virions, as measured by both p24 production and ability to infect T-cell lines with the virus produced by HepG2 cells. In contrast to the stimulatory effect of TNF-alpha on HIV-1 replication in T-cells and monocytes, up to 200 U/ml TNF-alpha treatment, at various times, either before or after HIV-1 infection, substantially inhibited p24 antigen production in HepG2 cells without causing any remarkable cytotoxicity. Gel-retardation assay revealed enhancement of a DNA-binding protein in TNF-alpha-treated HepG2 cells that binds to a specific sequence of the HIV-1 TAR, compared with the untreated control. CONCLUSIONS These results indicate the importance of cellular factor(s) in HIV-1 infection and suggest that cytokines in different tissues can induce opposite effects. TAR-binding protein may act as an inhibitory factor for HIV-1 replication in the HepG2 cell line.