The bovine leukemia virus Tax protein transactivates gene expression directed by the viral long terminal repeat (LTR) and contributes to immortalization of primary cells. Theoretical analysis of the protein sequence revealed the presence of a putative zinc finger structure at its amino end. Selected mutations in that region completely abolished transactivation, demonstrating its importance for LTR-directed gene regulation. However, these mutations did not interfere with the ability of tax to bind zinc or to contribute to immortalization of primary cells. Thus, transactivation of bovine leukemia virus LTR and target cell transformation are independent functions of Tax and involve different functional domains of the protein.