Peptides based on the amino (N) and carboxy (C)-terminal regions of human immunodeficiency virus type-1 (HIV-1) protease and on the C-terminus of p6* can inhibit HIV-1 protease activity by preventing dimerization. We developed a peptide dimerization inhibitor, P27, that included these domains and a cell permeable domain derived from HIV-1 Tat. P27 inhibited wild type (WT) and protease inhibitor (PI)-resistant HIV-1 protease (IC50: 0.23-0.32 microM). Kinetic and biochemical assays confirmed that P27 inhibits protease dimerization. Fluorescein-labeled peptide accumulated in MT-2 cells and protected acutely infected MT-2 cells from HIV-1-induced cytotoxicity (IC50: 5.1 microM). P27 also inhibited p24 accumulation from H9 and U937 cells chronically infected with WT or PI-resistant HIV-1. Immunoblot analysis on the supernatants and infected cells revealed a block in virus release by P27 rather than an inhibition of polyprotein processing. However, inhibition of p55 Gag processing by active-site inhibitors was enhanced when combined with P27, suggesting that P27 can affect protease function in maturing virions. Although P27 was rationally designed to block dimerization of the mature HIV-1 protease, the effects of P27 on HIV-1 replication may be related to partial inhibition of Gag-Pol processing leading to a disruption in virus release.