Nuclear bodies (NBs), characterized by the presence of the promyelocytic leukemia (PML) protein, are important components of the nuclear architecture, contributing to genetic and epigenetic control of gene expression. In investigating the mechanisms mediating HIV-1 latency, we determined that silenced but transcriptionally competent HIV-1 proviruses reside in close proximity to PML NBs and that this association inhibits HIV-1 gene expression. PML binds to the latent HIV-1 promoter, which coincides with transcriptionally inactive facultative heterochromatic marks, notably H3K9me2, at the viral genome. PML degradation and NB disruption result in strong activation of viral transcription as well as release of G9a, the major methyltransferase responsible for H3K9me2, and loss of facultative heterochromatin marks from the proviral DNA. Additionally, HIV-1 transcriptional activation requires proviral displacement from PML NBs by active nuclear actin polymerization. Thus, nuclear topology and active gene movement mediate HIV-1 transcriptional regulation and have implications for controlling HIV-1 latency and eradication.