Human T-cell leukemia virus type 1 (HTLV-1) is the causative agent of adult T-cell leukemia (ATL), whereas the closely related virus HTLV-2 has not been associated with such malignant conditions. HTLV-1 Tax1 oncoprotein transforms a rat fibroblast cell line (Rat-1) much more efficiently than does HTLV-2 Tax2. By using a differential display analysis, we isolated MAGI-3 as a Tax1-inducible gene in Rat-1 cells. Reverse transcription-polymerase chain reaction (RT-PCR) analysis confirmed that Tax1 induced MAGI-3 in Rat-1 cells. MAGI-3 has multiple PDZ domains and interacted with Tax1 but not Tax2 in 293T cells. The interaction of Tax1 with MAGI-3 was dependent on a PDZ domain-binding motif, which is missing in Tax2. The interaction of Tax1 with MAGI-3 altered their respective subcellular localization, and moreover, the interaction correlated well with the high transforming activities of Tax1 in Rat-1 cells relative to Tax2. MAGI-3 mRNA and the allied MAGI-1, but not MAGI-2, were expressed in HTLV-1-infected T-cell lines. Our results suggest that the interaction of Tax1 and MAGI-3 alters their respective biological activities, which may play a role in transformation by Tax1 as well as in the pathogenesis of HTLV-1-associated diseases.