One of the first steps in HIV gene expression is the recruitment of Tat protein to the transcription machinery after its binding to the RNA response element TAR. Starting from a pool of 3.2 x 10(6) individual chemical entities, we were able to select a hybrid peptoid/peptide oligomer of 9 residues (CGP64222) that was able to block the formation of the Tat/TAR RNA complex in vitro at nanomolar concentrations. NMR studies demonstrated that the compound binds similarly to polypeptides derived from the Tat protein and induces a conformational change in TAR RNA at the Tat-binding site. In addition, 10-30 microM CGP64222 specifically inhibited Tat activity in a cellular Tat-dependent transactivation assay [fusion-induced gene stimulation (FIGS) assay] and blocked HIV-1 replication in primary human lymphocytes. By contrast, peptides of a comparable size and side-chain composition inhibited cell fusion in the FIGS assay and only partially inhibited HIV-1 replication in primary human lymphocytes. Thus, we have discovered a compound, CGP64222, that specifically inhibits the Tat/TAR RNA interaction, both in vitro and in vivo.