Co-infection of hepatitis C virus (HCV) with other blood-borne pathogens such as human T cell leukemia virus (HTLV) is common in highly endemic areas. Clinical evidence showing a correlation between HTLV-I co-infection and rapid progression of HCV-associated liver disease promoted us to investigate the effect of HTLV-I-encoded Tax protein on HCV replication. Reporter assay showed that HCV replicon-encoded luciferase expression was significantly augmented by co-transfection of the Tax-expressing plasmid. Further, HCV RNA replication in replicon cells was increased either by co-culture with cells stably expressing Tax protein (Huhtax) or by culture in the presence of Huhtax-conditioned medium, indicating that Tax could also modulate HCV replication of adjacent cells in a paracrine manner. Additionally, HCV replication in Huhtax exhibited a reduced responsiveness to interferon-α-induced antiviral activity. This study demonstrates the facilitation of HCV replication by Tax protein, which may partially account for severer clinical consequences of HCV-related disease in HCV/HTLV co-infected individuals.