The protein Tat is encoded by the HIV-1 genome and is essential for viral replication because of its activation of viral transcription. Tat enhances the ability of RNA polymerase II (Pol II) to move long distances down the DNA through a poorly understood mechanism that involves its binding the to the 5' end of the nascent HIV-1 transcript. It has been suggested that the stimulation of transcript elongation by conventional DNA-binding activators may involve phosphorylation of the carboxy-terminal domain (CTD) of Pol II by the transcription factor TFIIH through the associated CAK kinase. Here we show that Tat-enhanced HIV-1 transcription in vitro requires both TFIIH and the CTD of Pol II. In addition, Tat, through its activation domain, both interacts with a functional TFIIH-containing complex and stimulates phosphorylation of a CTD-containing substrate by the TFIIH kinase. Under conditions that jointly restrict transcriptional elongation and TFIIH-mediated CTD phosphorylation, Tat stimulates both these activities. Furthermore, RNA synthesis is required for Tat to stimulate phosphorylation of the CTD when it is part of an initiation complex, as expected from Tat's interaction with viral transcripts. Thus, stimulation of Pol II elongation by Tat may involve direct effects on TFIIH-mediated CTD phosphorylation.