Phylogenetic analysis was used to study in vivo genetic variation of the V3 region of human immunodeficiency virus type 1 in relation to disease progression in six infants with vertically acquired human immunodeficiency virus type 1 infection. Nucleotide sequences from each infant formed a monophyletic group with similar average branch lengths separating the sets of sequences. In contrast to the star-shaped phylogeny characteristic of interinfant viral evolution, the shape of the phylogeny formed by sequences from the infants who developed AIDS tended to be linear. A computer program, DISTRATE, was written to analyze changes in DNA distance values over time. For the six infants, the rate of divergence from the initial variant was inversely correlated with CD4 cell counts averaged over the first 11 to 15 months of life (r = -0.87, P = 0.024). To uncover evolutionary relationships that might be dictated by protein structure and function, tree-building methods were applied to inferred amino acid sequences. Trees constructed from the full-length protein fragment (92 amino acids) showed that viruses from each infant formed a monophyletic group. Unexpectedly, V3 loop protein sequences (35 amino acids) that were found at later time points from the two infants who developed AIDS clustered together. Furthermore, these sequences uniquely shared amino acids that have been shown to confer a T-cell line tropic phenotype. The evolutionary pattern suggests that viruses from these infants with AIDS acquired similar and possibly more virulent phenotypes.