In a search for effective HIV-1 transcription inhibitors, we have evaluated more than 75,000 compounds for their inhibitory effects on Tat-induced human immunodeficiency virus type 1 (HIV-1) long terminal repeat (LTR)-driven reporter gene expression and found that EM2487, a novel small-molecule substance produced by a Streptomyces species, is a potent and selective inhibitor of HIV-1 replication in both acutely and chronically infected cells. Its 50% effective concentration for acute HIV-1 infection was 0.27 µM in peripheral blood mononuclear cells (PBMCs), while the 50% cytotoxic concentration for mock-infected PBMCs was 13.3 µM. EM2487 proved inhibitory to a variety of HIV-1 strains and HIV-2 in acutely infected T-cell lines (MOLT-4 and MT-4). The compound could suppress tumor necrosis factor alpha (TNF-)-induced HIV-1 production in latently infected cells (OM-10.1 and ACH-2) as well as constitutive viral production in chronically infected cells (MOLT-4/III_B and U937/III_B) without showing any cytotoxicity. EM2487 did not affect early events of the HIV-1 replication cycle, as determined by proviral DNA synthesis in acutely infected MOLT-4 cells. In contrast, the compound selectively prevented viral mRNA synthesis in OM-10.1 cells, suggesting that HIV-1 inhibition occurs at the transcriptional level. Furthermore, EM2487 did not inhibit TNF--induced HIV-1 LTR-driven reporter gene expression but did inhibit that induced by Tat, irrespective of the presence or absence of the nuclear factor B binding sites in the LTR. These results suggest that the mechanism of action is attributable in part to the inhibition of Tat function.