Activation of I-κB kinases (IKKs) and NF-κB by the human T lymphotropic virus type 1 (HTLV-1) trans-activator/oncoprotein, Tax, is thought to promote cell proliferation and transformation. Paradoxically, expression of Tax in most cells leads to drastic up-regulation of cyclin-dependent kinase inhibitors, p21(CIP1/WAF1) and p27(KIP1), which cause p53-/pRb-independent cellular senescence. Here we demonstrate that p21(CIP1/WAF1)-/p27(KIP1)-mediated senescence constitutes a checkpoint against IKK/NF-κB hyper-activation. Senescence induced by Tax in HeLa cells is attenuated by mutations in Tax that reduce IKK/NF-κB activation and prevented by blocking NF-κB using a degradation-resistant mutant of I-κBα despite constitutive IKK activation. Small hairpin RNA-mediated knockdown indicates that RelA induces this senescence program by acting upstream of the anaphase promoting complex and RelB to stabilize p27(KIP1) protein and p21(CIP1/WAF1) mRNA respectively. Finally, we show that down-regulation of NF-κB by the HTLV-1 anti-sense protein, HBZ, delay or prevent the onset of Tax-induced senescence. We propose that the balance between Tax and HBZ expression determines the outcome of HTLV-1 infection. Robust HTLV-1 replication and elevated Tax expression drive IKK/NF-κB hyper-activation and trigger senescence. HBZ, however, modulates Tax-mediated viral replication and NF-κB activation, thus allowing HTLV-1-infected cells to proliferate, persist, and evolve. Finally, inactivation of the senescence checkpoint can facilitate persistent NF-κB activation and leukemogenesis.