Nuclear Matrix and MARs have been implicated in the transcriptional regulation of host as well as viral genes but their precise role in HIV-1 transcription remains unclear. Here, we show that >98% of HIV sequences contain consensus MAR element in their promoter. We show that SMAR1 binds to the LTR MAR and reinforces transcriptional silencing by tethering the LTR MAR to nuclear matrix. SMAR1 associated HDAC1-mSin3 corepressor complex is dislodged from the LTR upon cellular activation by PMA/TNFalpha leading to an increase in the acetylation and a reduction in the trimethylation of histones, associated with the recruitment of RNA Polymerase II on the LTR. Overexpression of SMAR1 lead to reduction in LTR mediated transcription, both in a Tat dependent and independent manner, resulting in a decreased virion production. These results demonstrate the role of SMAR1 in regulating viral transcription by alternative compartmentalization of LTR between the nuclear matrix and chromatin.
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