Human immunodeficiency virus type 2 (HIV-2) gene expression is downmodulated by sequence elements downstream of the transcriptional initiation site, corresponding to the U5 region of the long terminal repeat (LTR) and further downstream. This repression appeared to be related more to the length of the sequence intervening the transcriptional initiation site and the coding region than to a particular sequence content. The repressive effect of the downstream segment was not affected by HIV-2 and HIV-1 TAT or by the cytomegalovirus transactivator IE-2 gene. Nor was it affected by T-cell activation signals or by such cytokines as tumor necrosis factor-alpha (TNF-alpha), interleukin-6 (IL-6), interferon-gamma (IFN-gamma), and interferon-alpha (IFN-alpha). In contrast to HIV-1, HIV-2 LTR-directed gene expression was not modulated by TNF-alpha. A specific sequence element, located downstream of the TAR element in the R region, seemed to participate in modulation of gene expression. This element interacted with a nuclear protein with a mobility of about 26 kD. The repressive effect of the downstream sequence was to a certain extent cell type dependent, suggesting the involvement of cell type-specific factors. It was more effective in human lymphocytic CEM cells than in Jurkat cells. This may be relevant to the HIV-2 cell tropism (replication), latency, and virulence.