The HIV-1 inducer of short transcripts (IST) is an unusual promoter element that activates the synthesis of short transcripts from the HIV-1 promoter as well as from heterologous promoters. While the DNA sequences constituting IST have been characterized in some detail, little is known about the biochemical mechanisms underlying IST activity. Here, we describe a cell-free transcription assay that faithfully reproduces the synthesis of IST-dependent HIV-1 short transcripts. As in vivo, formation of these short transcripts requires a functional IST element and is repressed in the presence of the viral trans-activator Tat. Short transcript and full-length transcript synthesis respond differently to variations in several reaction parameters, suggesting that the short and full-length transcripts are synthesized by transcription complexes with distinct biochemical properties. In particular, short transcript synthesis is resistant to the action of 5,6-dichloro-1-beta-D-benzimidazole, an inhibitor of transcript elongation. Formation of transcription complexes directed by the IST element may, therefore, not require the activity of a factor inhibited by 5, 6-dichloro-1-beta-D-benzimidazole, such as the TFIIH-associated or pTEFb kinases.