HIV-1 TAR RNA is the binding site of the viral protein Tat, the trans-activator of the HIV-1 LTR. It is present at the 5' end of all HIV-1 spliced and unspliced mRNAs in the nucleus as well as in the cytoplasm. It has a highly folded stem-bulge-loop structure, which also binds cellular proteins to form ribonucleoprotein complexes. The Tat-Cyclin T1-CDK9 complex is the main component in the trans-activation of HIV-1 and its affinity for TAR is regulated through Tat acetylation by histone acetyl transferases. Recent studies show that this complex is able to recruit other cellular partners to mediate efficient transcriptional elongation. TRBP, PKR and La bind directly to the TAR RNA structure and influence translation of HIV-1 in either positive or negative manners. Some mutations in TAR RNA severely impair HIV-1 trans-activation, translation and viral production, showing its functional importance. The overexpression or suppression of several TAR RNA-binding proteins has a strong impact on viral replication pointing out their major role in the viral life cycle. TAR RNA has been the target of drug development to inhibit viral replication. Recent data using small molecules or RNA-based technologies show that acting on the TAR RNA or on its viral and cellular binding factors effectively decreases virion production.