Although many animal viruses block the interferon (IFN) signaling pathway, this issue has not been previously investigated in retrovirus-infected cells. For this purpose, an infectious molecular clone of human T-cell leukemia virus type 1 (HTLV-1) was transfected into 293T or HeLa cells and was found to reduce interferon-stimulated response element (ISRE) reporter activity. This effect was independent of expression of the polymerase or envelope products and independent of the ability of Tax to activate the NFkappaB transcriptional pathway. IFN-alpha activation of 6 of 7 endogenous ISRE-regulated genes was also variably reduced, but not IFN-gamma-activated response element-mediated expression of interferon regulatory factor 1. HTLV-1 reduced the phosphorylation of tyrosine kinase 2 (TYK2) and signal transducer and transcriptional activator 2 (STAT2), suggesting a specific effect of HTLV-1 on the ability of an adaptor tyrosine kinase to transfer an IFN signal to the STAT-transcriptional activator complex.