A HeLa T4 cell line containing a defective human immunodeficiency virus type 1 (HIV-1) DNA (HD4) was isolated. After transactivation with Tat, the HD4 DNA was transcribed into a single 3.7-kb mRNA that encodes a chimeric CD4/Env protein and a multitarget-ribozyme directed against multiple sites within the gp120 coding region of HIV-1 RNA (Chen et al., 1992). Early steps in HIV infection such as entry, reverse transcription, and proviral DNA formation were not affected in HD4 cells, and HD4 was efficiently transactivated after either HIV-1 or HIV-2 infections. HIV-2, which lacks all of the HIV-1-specific ribozyme target sites, replicated to high levels in HD4 cells whereas HIV-1 replication was selectively inhibited. Despite a reduced accumulation of all HIV-1 transcripts, transactivation of HD4 was efficient. Surprisingly, the most abundant, multiply spliced mRNAs were reduced even though they lack all of the ribozyme target sites. These results strongly suggest that the ribozyme co-localizes with unspliced HIV-1 pre-mRNA and/or genomic HIV-1 RNA in the nucleus. Cleavage of these precursor RNAs explains the reduction of all spliced and unspliced HIV-1 RNAs. Cleavage of genomic RNA probably contributed to the three-fold reduction in the infectivity of viral progeny. Thus, the HD4 ribozyme RNA functioned as a ribozyme in the nucleus and as a mRNA for a chimeric CD4/Env protein in the cytoplasm. Its unusual large size for a ribozyme (3.7 kb) indicates that, in the future, other antiviral proteins, like negative transdominant mutant HIV-1 proteins, may also be encoded to increase its antiviral potential in a gene therapy approach.