Retrovirus integration is an obligatory step for the viral life cycle, but large amounts of unintegrated DNA (uDNA) accumulate during retroviral infection. For simple retroviruses, in the absence of integration, viral genomes are epigenetically silenced in host cells. For complex retroviruses such as HIV, preintegration transcription has been found to occur at low levels from a large population of uDNA even in the presence of host epigenetic silencing mechanisms. HIV preintegration transcription has been suggested to be a normal early process of HIV infection that leads to the syntheses of all three classes of viral transcripts: multiply-spliced, singly-spliced, and unspliced genomic RNA; only viral early proteins such as Nef are selectively translated at low levels in blood CD4 T cells and macrophages, the primary targets of HIV. The initiation and persistence of HIV preintegration transcription have been suggested to rely on viral accessory proteins, particularly virion Vpr and de novo Tat generated from uDNA; both proteins have been shown to antagonize host epigenetic silencing of uDNA. In addition, stimulation of latently infected resting T cells and macrophages with cytokines, PKC activator, or histone deacetylase inhibitors has been found to greatly upregulate preintegration transcription, leading to low-level viral production or even replication from uDNA. Functionally, Nef synthesized from preintegration transcription is biologically active in modulating host immune functions, lowering the threshold of T cell activation, and downregulating surface CD4, CXCR4/CCR5, and HMC receptors. The early Tat activity from preintegration transcription antagonizes repressive minichromatin assembled onto uDNA. The study of HIV preintegration transcription is important to understanding virus-host interaction and antagonism, viral persistence, and the mechanism of integrase drug resistance. The application of unintegrated lentiviral vectors for gene therapy also offers a safety advantage for minimizing retroviral vector-mediated insertional mutagenesis.