Proteolytically produced carboxyl-terminal fragments of the human immunodeficiency virus type-1 (HIV-1) Tat protein that include a conserved region rich in arginine and lysine bind specifically to transactivation response RNA sequences (TAR). A chemically synthesized 14-residue peptide spanning the basic subdomain also recognizes TAR, identifying this subdomain as central for RNA interaction. TAR RNA forms a stable hairpin that includes a six-residue loop, a trinucleotide pyrimidine bulge, and extensive duplex structure. Competition and interference experiments show that the Tat-derived fragments bind to double-stranded RNA and interact specifically at the pyrimidine bulge and adjacent duplex of TAR.