Human T-cell leukemia virus type 1 (HTLV-1) is an oncogenic retrovirus associated primarily with adult T-cell leukemia and neurological disease. HTLV-1 encodes the positive trans-regulatory proteins Tax and Rex, both of which are essential for viral replication. Tax activates transcription initiation from the viral long terminal repeat and modulates the transcription or activity of a number of cellular genes. Rex regulates gene expression posttranscriptionally by facilitating the cytoplasmic expression of incompletely spliced viral mRNAs. Tax and Rex mutants have been identified that have defective activities or impaired biochemical properties associated with their function. To ultimately determine the contribution of specific protein activities on viral replication and cellular transformation of primary T cells, mutants need to be characterized in the context of an infectious molecular clone. Since the tax and rex genes are in partially overlapping reading frames, mutation in one gene frequently disrupts the other, confounding interpretation of mutational analyses in the context of the virus. Here we generated and characterized a unique proviral clone (H1IT) in which the tax and rex genes were separated by expressing Tax from an internal ribosome entry site. We showed that H1IT expresses both functional Tax and Rex. In short- and long-term coculture assays, H1IT was competent to infect and immortalize primary human T cells similar to wild-type HTLV-1. In contrast, H1IT failed to efficiently replicate and persist in inoculated rabbits, thus emphasizing the importance of temporal and quantitative regulation of specific mRNA for viral survival in vivo.