Human T-cell leukemia virus type 1 (HTLV-1) Tax is a nuclear protein with striking pleiotropic functionality. We recently demonstrated that Tax localizes to a multicomponent nuclear speckled structure (Tax speckled structure [TSS]). Here, we examine these structures further and identify a partial overlap of TSS with transcription hot spots. We used a strategy of directed expression via fusion proteins to determine if these transcription sites are the subtargets within TSS required for Tax function. When fused to human immunodeficiency virus type 1 (HIV-1) Tat, the resulting Tat-Tax fusion protein displayed neither a Tat-like nor a Tax-like pattern but rather was targeted specifically to the transcription subsites. The Tat-Tax fusion was able to activate both the HIV-1 long terminal repeat (LTR) and the HTVL-1 LTR at the same level as the individual component; thus, targeting proteins to transcription hot spots was compatible with both Tax and Tat transcription function. In contrast, the fusion with HIV-1 Rev, Rev-Tax, resulted in a pattern of expression that was largely Rev-like (nucleolar and cytoplasmic). The reduced localization of Rev-Tax to transcription sites was reflected in a 10-fold drop in activation of the HTLV-1 LTR. However, there was no loss in the ability of Tax to activate via NF-kappaB. Thus, NF-kappaB-dependent Tax function does not require targeting of Tax to these transcription sites and suggests that activation via NF-kappaB is a cytoplasmic function. Selective mutation of the nuclear localization signal site in the Rev portion resulted in retargeting of Rev-Tax to TSS and subsequent restoration of transcription function, demonstrating that inappropriate localization preceded loss of function. Mutation of the nuclear export signal site in the Rev portion had no effect on transcription, although the relative amount of Rev-Tax in the cytoplasm was reduced. Finally, in explaining how Tax can occupy multiple subcellular sites, we show that Tax shuttles from the nucleus to the cytoplasm in a heterokaryon fusion assay. Thus, pleiotropic functionality by Tax is regulatable via shuttling between discrete subcellular compartments.