HTLV-1 Tax can induce senescence by up-regulating the levels of cyclin-dependent kinase inhibitors p21(CIP1/WAF1) and p27(KIP1). Tax increases p27(KIP1) protein stability by activating the anaphase promoting complex/cyclosome (APC/C) precociously, causing degradation of Skp2 and inactivation of SCF(Skp2), the E3 ligase that targets p27(KIP1). The rate of p21(CIP1/WAF1) protein turnover, however, is unaffected by Tax. Rather, the mRNA of p21(CIP1/WAF1) is greatly up-regulated. Here we show that Tax increases p21 mRNA expression by transcriptional activation and mRNA stabilization. Transcriptional activation of p21(CIP1/WAF1) by Tax occurs in a p53-independent manner and requires two tumor growth factor-beta-inducible Sp1 binding sites in the -84 to -60 region of the p21(CIP1/WAF1) promoter. Tax binds Sp1 directly, and the CBP/p300-binding activity of Tax is required for p21(CIP1/WAF1) trans-activation. Tax also increases the stability of p21(CIP1/WAF1) transcript. Several Tax mutants trans-activated the p21 promoter, but were attenuated in stabilizing p21(CIP1/WAF1) mRNA, and were less proficient in increasing p21(CIP1/WAF1) expression. The possible involvement of Tax-mediated APC/C activation in p21(CIP1/WAF1) mRNA stabilization is discussed.