Human T-cell leukemia virus (HTLV) infection is a chronic, lifelong infection that is associated with the development of leukemia and neurological disease after a long latency period, and the mechanism by which the virus is able to evade host immune surveillance is elusive. Besides the structural and enzymatic proteins, HTLV encodes regulatory (Tax and Rex) and accessory (open reading frame I [ORF I] and ORF II) proteins. Tax activates viral and cellular transcription and promotes T-cell growth and malignant transformation. Rex acts posttranscriptionally to facilitate cytoplasmic expression of incompletely spliced viral mRNAs. Recently, we reported that the accessory gene products of HTLV-1 and HTLV-2 ORF II (p30II and p28II, respectively) are able to restrict viral replication. These proteins act as negative regulators of both Tax and Rex by binding to and retaining their mRNA in the nucleus, leading to reduced protein expression and virion production. Here, we show that p28II is recruited to the viral promoter in a Tax-dependent manner. After recruitment to the promoter, p28II or p30II then travels with the transcription elongation machinery until its target mRNA is synthesized. Experiments artificially directing these proteins to the promoter indicate that p28II, unlike HTLV-1 p30II, displays no transcriptional activity. Furthermore, the tethering of p28 II directly to tax/rex mRNA resulted in repression of Tax function, which could be attributed to the ability of p28II to block TAP/p15-mediated enhancement of Tax expression. p28II-mediated reduction of viral replication in infected cells may permit survival of the cells by allowing escape from immune recognition, which is consistent with the critical role of HTLV accessory proteins in viral persistence in vivo.