A peptide designated DP-107 was synthesized containing amino acid residues 558-595 of the envelope glycoprotein gp160 of human immunodeficiency virus type 1 strain LAI (HIV-1LAI). Algorithms for secondary structure have predicted that this region of the envelope transmembrane protein should form an extended alpha-helix. Consistent with this prediction, analysis by circular dichroism (CD) indicated that, under physiological conditions, DP-107 is approximately 85% helical. The high degree of stable secondary structure in a synthetic peptide of this size suggests self-association typical of a coiled coil or leucine zipper. In biological assays, the peptide efficiently blocked virus-mediated cell-cell fusion processes as well as infection of peripheral blood mononuclear cells by both prototypic and primary isolates of HIV-1. A single amino acid substitution in the peptide greatly destabilized its solution structure as measured by CD and abrogated its antiviral activity. An analogue containing a terminal cysteine was oxidized to form a dimer, and this modification lowered the dose required for antiviral effect from 5 to about 1 microgram/ml. These results suggest that both oligomerization and ordered structure are necessary for biological activity. They provide insights also into the role of this region in HIV infection and the potential for development of a new class of antiviral agents.