The human immunodeficiency virus type 1 Rev protein controls expression of certain viral RNAs by binding to these RNAs in the nucleus. To investigate how dominant negative Rev mutants inhibit Rev function, we fused such mutants to hormone-dependent localization signals from the glucocorticoid receptor. Each was found to have fully potent inhibitory activity whether expressed in the nucleus or in the cytoplasm. Wild-type Rev colocalized with an inhibitory fusion protein, implying that the two proteins interact. The resulting complexes accumulated within nuclei in response to steroids but had no effect on expression of Rev-responsive mRNAs. A mutation known to block in vitro oligomerization of Rev abolished both complex formation and inhibitory activity of the mutant fusion proteins. Thus, trans-dominant inhibition of Rev does not require competition for nuclear substrates but may instead reflect the ability of a mutant to form nonfunctional complexes with the wild-type protein in vivo.