Bicyclams are a novel class of antiviral compounds which act as potent and selective inhibitors of the replication of human immunodeficiency virus type 1 (HIV-1) and HIV-2. They block an early step in the viral life cycle following adsorption to the CD4 receptor and preceding reverse transcription. To identify the molecular target of these compounds, we genetically analyzed variants of the HIV-1 molecular clone NL4-3, which developed resistance against two structurally related bicyclams, JM2763 and the more potent SID791. The resistant strains were obtained after long-term passaging in MT-4 cells in the presence of progressively increasing compound concentrations. Recombinants between selected genes of the resistant strains and the parental NL4-3 provirus were generated by adapting the marker rescue technique to MT-4 cells. The bicyclam-resistant phenotype was rescued by transferring the envelope gp120 gene of bicyclam-resistant virus into the NL4-3 parental genetic background. In the gp120 genes of the resistant strains, we identified several mutations leading to amino acid substitutions in the V3 loop. Furthermore, two substitutions of highly conserved amino acids in close proximity to the disulfide bridges of the V3 and V4 loops were found in both SID791- and JM2763-resistant strains. Additional mutations in regions encoding V3, C4, V5, and C5 were present in SID791-resistant viruses. Recombination experiments with overlapping parts of the envelope gene indicated that most, if not all, of the mutations were necessary to develop the fully SID791 resistant phenotype. The mutations in the C-terminal part of gp120 downstream of the V3 loop sequence conferred partial resistance to JM2763 but did not significantly decrease susceptibility to SID791. The genetic data and the biological properties of the resistant viruses point to inhibition of entry and fusion as the mode of action of the HIV-inhibitory bicyclams. A possible mechanism of binding of bicyclams to gp120 leading to inhibition of unfolding of gp120 and its shedding from the gp41 fusion domain is discussed.