In a search for effective HIV-1 transcription inhibitors, we have evaluated more than 75,000 compounds for their inhibitory effects on Tat-induced human immunodeficiency virus type 1 (HIV-1) long terminal repeat (LTR)-driven reporter gene expression and found that EM2487, a novel small-molecule substance produced by a Streptomyces species, is a potent and selective inhibitor of HIV-1 replication in both acutely and chronically infected cells. Its 50% effective concentration for acute HIV-1 infection was 0.27 microM in peripheral blood mononuclear cells (PBMCs), while the 50% cytotoxic concentration for mock-infected PBMCs was 13.3 microM. EM2487 proved inhibitory to a variety of HIV-1 strains and HIV-2 in acutely infected T-cell lines (MOLT-4 and MT-4). The compound could suppress tumor necrosis factor alpha (TNF-alpha)-induced HIV-1 production in latently infected cells (OM-10.1 and ACH-2) as well as constitutive viral production in chronically infected cells (MOLT-4/III(B) and U937/III(B)) without showing any cytotoxicity. EM2487 did not affect early events of the HIV-1 replication cycle, as determined by proviral DNA synthesis in acutely infected MOLT-4 cells. In contrast, the compound selectively prevented viral mRNA synthesis in OM-10.1 cells, suggesting that HIV-1 inhibition occurs at the transcriptional level. Furthermore, EM2487 did not inhibit TNF-alpha-induced HIV-1 LTR-driven reporter gene expression but did inhibit that induced by Tat, irrespective of the presence or absence of the nuclear factor kappaB binding sites in the LTR. These results suggest that the mechanism of action is attributable in part to the inhibition of Tat function.