Two recombinant retroviral systems are described that can be used to analyze antiretroviral drug activity and HIV breakthrough (replication in the presence of the drug). The first system utilizes a recombinant HIV encoding beta-galactosidase as a reporter gene (HIV-LacZ). The defective HIV-LacZ virus is produced in COS cells after co-transfection of a plasmid encoding the HIV-LacZ genome with a plasmid encoding HIV proteins necessary for packaging and infectivity. Subsequent infection of CD4+ target cells, followed by assay for LacZ expression, permits the rapid identification of individual virus-infected cells. This system can be used to quantitate the inhibition of early events in the HIV replicative cycle and is suitable for the screening of compounds for anti-HIV activity. However, this system cannot be used to analyze HIV drug resistance because of the limited genetic heterogeneity of the virus that is produced in COS cells. To circumvent this problem, a second system has been developed in which heterogenous recombinant HIV is produced by rescue with replication-competent 'helper' HIV. This system required the production of CD4+ cell lines containing defective proviruses encoding either LacZ or guanosine phosphoribosyl transferase (gpt). The defective proviruses are rescued by infection of the cell lines with 'helper' HIV and used to infect target cells in the presence of antiretroviral agents. Subsequent reporter gene assay is used to identify virus-infected cells. This system has been used to detect rare HIV breakthrough infection of cells in the presence of the non-nucleoside reverse transcriptase inhibitor TIBO R82150. Similar analyses with other antiretroviral agents, alone and in combination, may help identify therapeutic strategies that minimize breakthrough replication of HIV.