In this study, the HIV-1 variant viruses from ten pregnant women and their infants were isolated and characterized longitudinally in order to determine the role that viral envelope (gp120-V3 loop) gene variation and viral tropism play in vertical transmission. Biological phenotyping of each HIV variant was accomplished by growth in MT-2, and macrophages from healthy and non-HIV-infected donors. Genetic characterization of the variants was accomplished by DNA sequence analysis. All the women enrolled in this study received ZDV therapy. Virus was cultured from eight out of ten env V3-PCR positive mothers. HIV-1 isolates were all non-syncitium inducing variants. None of the mothers were found to transmit HIV, as determined by DNA PCR and quantitative co-cultures on their infants which were seronegative for HIV-1 through one year after birth. Viral cultures from infant blood samples were negative and infants were all healthy. However, nested env V3-PCR detected proviral DNA in five out of ten infants. In contrast, conventional gag-PCR was negative in the same five infants. Sequences of the five maternal-infant pairs were different, suggesting unique infant HIV-1 variants. The three highest maternal viral load values corresponded to infants that were env V3-PCR positive. These results suggest that HIV-1 particles are transmitted from ZDV-treated mothers to infants. Infant follow up is recommended to determine if HIV-1 has been inhibited by the immune system of the infants.