Human immunodeficiency virus type 1 (HIV-1) gene expression is dependent on a number of cis-acting DNA elements present in the HIV-1 long terminal repeat. Previous studies have demonstrated that the TATA element is critical for basal and Tat-induced HIV-1 gene expression. The HIV-1 TATA region has an unusual structure in that the TATA sequence is flanked by two palindromic sequence motifs (CANNTG) known as E boxes which can serve as binding sites for the basic helix-loop-helix (bHLH) class of DNA-binding proteins. In this study, we performed site-directed mutagenesis of both the TATA and the flanking E box sequences of HIV-1. We also substituted the sequences flanking the adenovirus E3 promoter TATA sequence for those flanking the HIV-1 TATA sequence. Constructs were assayed for their levels of basal and Tat-induced gene expression by both in vitro transcription and transient expression assays. Both the TATA box and flanking sequences including the E box motifs were found to be important in modulating both basal gene expression and Tat-induced HIV-1 gene expression. Gel retardation analysis demonstrated that binding of both the recombinant TATA-binding protein (TBP) and the TFIID fraction which contains both TBP and TBP-associated factors was dependent primarily on the TATA element. However, competition analysis suggested that the E boxes may play a role in stabilizing the binding of TFIID but not recombinant TBP. Two proteins representing different classes of bHLH proteins, E47 and AP-4, were assayed for their ability to bind to the flanking E box motifs. We isolated a cDNA clone encoding the complete AP-4 protein and demonstrated that both AP-4 and E47 bound specifically to the 3' E box motif, which contains sequences that correspond to the consensus binding site (CAGCTG). Gel retardation analysis indicated that the binding of AP-4 to the E boxes excluded the binding of TBP to the TATA box. These studies are consistent with a model in which different classes of cellular bHLH proteins may be involved in regulating HIV-1 TATA element function by either inhibiting or promoting the assembly of different preinitiation transcriptional complexes.