Several hammerhead ribozymes targeted to different sites within the retroviral packaging (psi) sequences of the Moloney murine leukemia virus (Mo-MLV) and the human immunodeficiency virus type 1 (HIV-1) were designed and shown to cleave target RNA in vitro at the chosen sites. The engineered ribozymes, as well as antisense sequence complementary to the Mo-MLV psi packaging region, were cloned into the 3' untranslated region of the neomycin-resistance gene (neo). This was coupled to the simian virus 40 early promoter within the pSV2neo vector. For the ribozymes against the Mo-MLV psi site, the constructs were transfected into Mo-MLV-infected and virus-producing mouse NIH 3T3 cells. With the exception of one of the single ribozymes (the one least effective in cutting target RNA in vitro), all of the constructs effectively (70-80%) suppressed retrovirus production. These results demonstrate a direct correlation between in vitro cleavage and in vivo ribozyme-mediated virus suppression. In addition, a ribozyme targeted to the HIV-1 psi packaging site was engineered into the same vector and transfected into the human T-cell line SupT1. The transfectants were cloned and then challenged with HIV-1. When compared to vector-transfected control cells, a significant reduction in HIV-1 production was observed as measured by p24 and syncytia formation assays. This study demonstrates a feasible approach to the suppression of retrovirus replication by targeting the psi packaging site with hammerhead ribozymes.