TAR RNA binding protein (TRBP) belongs to an RNA binding protein family that includes the double-stranded RNA-activated protein kinase (PKR), Drosophila Staufen and Xenopus xlrbpa. One member of this family, PKR, is a serine/threonine kinase which has anti-viral and anti-proliferative effects. In this study we show that TRBP is a cellular down-regulator of PKR function. Assaying expression from an infectious HIV-1 molecular clone, we found that PKR inhibited viral protein synthesis and that over-expression of TRBP effectively countered this inhibition. In intracellular and in cell-free assays we show that TRBP directly inhibits PKR autophosphorylation through an RNA binding-independent pathway. Biologically, TRBP serves a growth-promoting role; cells that overexpress TRBP exhibit transformed phenotypes. Our results demonstrate the oncogenic potential of TRBP and are consistent with the notion that intracellular PKR function contributes physiologically towards regulating cellular proliferation.