The TAR sequence at the 5′-termini of all HIV-1 mRNA species forms a stable structure that is responsible for both transcriptional and translational regulation of HIV-1. Previously we and others reported that purified TAR RNA synthesized by in vitro transcription could activate two interferon-induced enzymes, the protein kinase (PKR) and 2-5A-synthetase. Because the PKR- and 2-5A-systems block protein synthesis initiation and induce RNA decay, respectively, these findings suggested mechanisms for the control of HIV-1 replication by the interferon system. To determine if contaminating dsRNA from in vitro transcription reactions was responsible for this effect, as suggested by Gunnery et al. 1990, (Proc. Natl. Acad. Sci. USA 87, 8687), we have reexamined these findings using chemically synthesized TAR (nucleotides +1 to +57). TAR RNA is shown here to have an intrinsic ability to activate PKR and 2-5A-synthetase. In contrast, a mutant form of TAR designed to have a disrupted secondary structure did not stimulate either enzyme. Chemically synthesized TAR mimicked other dsRNA species in its ability to activate and inhibit PKR at low and high RNA concentrations, respectively. HIV-1 TAT protein inhibited activation of PKR by HIV-1 TAR RNA suggesting an escape mechanism for the virus.