Hammerhead ribozymes have been shown to silence human immunodeficiency virus-1 (HIV-1) gene expression by site-specific cleavage of viral mRNA. The two major factors that determine whether ribozymes will be effective for post-transcriptional gene silencing are colocalization of the ribozyme and the target RNAs, and the choice of an appropriate target site on the mRNA. An effective screening strategy for potential targets on the viral genome is the use of ribozyme libraries in cell culture. Capitalizing on previous findings that HIV-1 and ribozymes can be colocalized in the nucleolus, we created a novel hammerhead ribozyme library by inserting hammerhead ribozymes with fully randomized stems 1 and 2 into the body of the U16 small nucleolar RNA (snoRNA). Following three rounds of cotransfection with an HIV-1 proviral DNA harboring the herpes simplex virus thymidine kinase (HSV-TK) gene, we selected for gancyclovir-resistant cells and identified a ribozyme sequence that could potentially target both the U5 and gag genes of HIV-1 regions on the HIV-1 genome through partial homologies with these targets. When the ribozymes were converted to full complementarity with the targets, they provided potent inhibition of HIV-1 replication in cell culture. These results provide a novel approach for identifying ribozyme targets in HIV-1.