Human immunodeficiency virus type 1 (HIV-1) Vif is required for productive infection of T lymphocytes and macrophages. Virions produced in the absence of Vif have abnormal core morphology and those produced in primary T cells carry immature core proteins and low levels of mature capsid (M. Simm, M. Shahabuddin, W. Chao, J. S. Allan, and D. J. Volsky, J. Virol. 69:4582-4586, 1995). To investigate whether Vif influences the activity of HIV-1 protease (PR), the viral enzyme which is responsible for processing Gag and Gag-Pol precursor polyproteins into mature virion components, we transformed bacteria to inducibly express truncated Gag-Pol fusion proteins and Vif. We examined the cleavage of polyproteins consisting of matrix to PR (Gag-PR), capsid to PR (CA-PR), and p6Pol to PR (p6Pol-PR) and evaluated HIV-1 protein processing at specific sites by Western blotting using antibodies against matrix, capsid, and PR proteins. We found that Vif modulates HIV-1 PR activity in bacteria mainly by preventing the release of mature MA and CA from Gag-PR, CA from CA-PR, and p6Pol from p6Pol-PR, with other cleavages being less affected. Using subconstructs of Vif, we mapped this activity to the N-terminal half of the molecule, thus identifying a new functional domain of Vif. Kinetic study of p6Pol-PR autocatalysis in the presence or absence of Vif revealed that Vif and N'Vif reduce the rate of PR-mediated proteolysis of this substrate. In an assay of in vitro proteolysis of a synthetic peptide substrate by purified recombinant PR we found that recombinant Vif and the N-terminal half of the molecule specifically inhibit PR activity at a molar ratio of the N-terminal half of Vif to PR of about 1. These results suggest a mechanism and site of action of Vif in HIV-1 replication and demonstrate novel regulation of a lentivirus PR by an autologous viral protein acting in trans.