Human T-cell leukemia virus type I (HTLV-I) is associated with two human diseases, adult T-cell leukemia (ATL) and tropical spastic paraparesis/HTLV-I associated myelopathy (TSP/HAM). Lymphocytes from patients with ATL or TSP/HAM display abnormal proliferation properties in culture. Here we report that purified, soluble Tax1 protein can be taken up by, and stimulate proliferation of, uninfected human peripheral blood lymphocytes (PBLs) that have been stimulated with phytohemagglutinin (PHA). Tax1 was 40 to 70% as active as interleukin-2 (IL-2) in stimulating proliferation of PBLs. Heat inactivation, chloroform extraction, and immunoprecipitation with antisera specific for Tax1 each abolished the ability of the protein to stimulate lymphocyte proliferation. Tax1 failed to stimulate PBL proliferation in the absence of PHA. After an initial round of cell division, Tax1-treated PBLs exhibited prolonged sensitivity to IL-2-induced proliferation. These results indicate that Tax1 can stimulate lymphocyte proliferation in culture and imply that extracellular Tax1 may be involved in the spontaneous proliferation of TSP/HAM lymphocytes and the IL-2-dependent proliferation of ATL lymphocytes.