Both AZT and its novel 5'-hydrogen phosphonate derivative, Phosphazid, possess similar in vitro activity and resistance profiles. Experiments involving AZT-resistant virus isolates revealed a strong correlation between resistance to AZT and cross-resistance to Phosphazid. In vitro selection for resistance to Phosphazid yielded viruses that were about 15-fold less sensitive than wild-type virus to this drug. Sequencing of the reverse transcriptase region of seven Phosphazid-selected viruses revealed a single codon mutation, D67N, that is associated with resistance to AZT.