HIV-1 strains that possess a one or two amino acid insert between codons 102 and 103 of the reverse transcriptase (RT) gene were identified in three HIV-1-infected individuals. Each strain also had one or more known mutations associated with nucleoside RT inhibitors (NRTIs) and non-nucleoside RT inhibitors (NNRTIs). Recombinant viruses from these strains had reduced susceptibility to efavirenz and nevirapine, and homology modelling predicted a loss of binding contacts with efavirenz. Mutagenesis studies indicated that replication of insert-containing strains was dependent on RT gene mutations and polymorphisms that co-evolved with the insert. These results suggest that inserts in the NNRTI-binding pocket contribute to NNRTI resistance, but are tolerated only under specific genetic conditions.