The transactivating response element (TAR) of human immunodeficiency virus 1 (HIV-1) is essential for promoter transactivation by the viral transactivator of transcription (Tat). The Tat-TAR interaction thereby recruits active positive transcription elongation factor b (P-TEFb) from its inactive, 7SK/HEXIM1-bound form, leading to efficient viral transcription. Here, we show that the 7SK RNA-associating chromatin regulator HMGA1 can specifically bind to the HIV-1 TAR element and that 7SK RNA can thereby compete with TAR. The HMGA1-binding interface of TAR is located within the binding site for Tat and other cellular activators, and we further provide evidence for competition between HMGA1 and Tat for TAR-binding. HMGA1 negatively influences the expression of a HIV-1 promoter-driven reporter in a TAR-dependent manner, both in the presence and in the absence of Tat. The overexpression of the HMGA1-binding substructure of 7SK RNA results in a TAR-dependent gain of HIV-1 promoter activity similar to the effect of the shRNA-mediated knockdown of HMGA1. Our results support a model in which the HMGA1/TAR interaction prevents the binding of transcription-activating cellular co-factors and Tat, subsequently leading to reduced HIV-1 transcription.