The human immunodeficiency virus type 1 (HIV-1) has evolved to coordinate its replication with the activation state of the host CD4T cell. To this end, it taps into major host cell signaling pathways and their associated transcription factors. Of these, T-cell activation and the transcription factor NF-κB, respectively, have become the best-studied examples. The past several years have revealed compelling evidence that another transcription factor family involved in T-cell activation, the nuclear factor of activated T cells (NFAT), plays an important role in the regulation of HIV-1. Major advances have been made in our understanding of the interaction of HIV-1 with this intriguing transcription factor. The duplicated NF-κB binding sites in the HIV-1 enhancer surprisingly also bind NFAT proteins and appear to be the most important targets for NFAT transactivation of the HIV-1 long terminal repeat. The crystal structure of NFAT1 bound to one of these duplicated sites was solved recently. Interestingly, it showed that NFAT1 binds to this site as a homodimer and occupies the core of the NF-κB site, suggesting mutually exclusive binding and alternate transactivation by these two factors. NFAT also regulates HIV-1 infection indirectly, as it can relieve a block to reverse transcription in quiescent T cells. In turn, HIV-1, and particularly its Tat and Nef gene products, can upregulate NFAT expression and activity. This reciprocal regulation between virus and transcription factor potentially creates a positive feedback loop, which may facilitate the establishment of early HIV-1 infection and, later, the transition from latent to productive infection. The immunosuppressive drug cyclosporin A (CsA) inhibits NFAT activity and thus represents a potential treatment for HIV-1 infection. Recent small-scale clinical trials have yielded optimistic results, suggesting roles for CsA after organ transplantation in HIV-1+ individuals and as adjunct treatment in stable early HIV-1 infection. © 2004 Nature Publishing Group All rights reserved.