The hydrophobic pocket in the HIV-1 gp41 N-terminal heptad repeat (NHR) domain plays an important role in viral fusion and entry into the host cell, and serves as an attractive target for development of HIV-1 fusion/entry inhibitors. The peptide anti-HIV drug targeting gp41 NHR, T-20 (generic name: enfuvirtide; brand name: Fuzeon), was approved by the U.S. FDA in 2003 as the first HIV fusion/entry inhibitor for treatment of HIV/AIDS patients who fail to respond to the current antiretroviral drugs. However, because T20 lacks the pocket-binding domain (PBD), it exhibits low anti-HIV-1 activity and short half-life. Therefore, several next-generation HIV fusion inhibitory peptides with PBD have been developed. They possess longer half-life and more potent antiviral activity against a broad spectrum of HIV-1 strains, including the T-20-resistant variants. Nonetheless, the clinical application of these peptides is still limited by the lack of oral availability and the high cost of production. Thus, development of small molecule compounds targeting the gp41 pocket with oral availability has been promoted. This review describes the main approaches for identification of HIV fusion/entry inhibitors targeting the gp41 pocket and summarizes the latest progress in developing these inhibitors as a new class of anti-HIV drugs.