A strategy for antiviral drug discovery is the elucidation and imitation of viral interference mechanisms. HIV-1 patients benefit from a coinfection with GB Virus C (GBV-C), since HIV-positive individuals with long-term GBV-C viraemia show better survival rates than HIV-1 patients without persisting GBV-C. A direct influence of GBV-C on HIV-1 replication has been shown in coinfection experiments. GBV-C is a human non-pathogenic member of the flaviviridae family that can replicate in T and B cells. Therefore, GBV-C shares partly the same ecological niche with HIV-1. In earlier work we have demonstrated that recombinant glycoprotein E2 of GBV-C and peptides derived from the E2 N-terminus interfere with HIV entry. In this study we investigated the underlying mechanism. Performing a virus-cell fusion assay and temperature-arrested HIV-infection kinetics, we provide evidence that the HIV-inhibitory E2 peptides interfere with late HIV-1 entry steps after the engagement of gp120 with CD4 receptor and coreceptor. Binding and competition experiments revealed that the N-terminal E2 peptides bind to the disulfide loop region of HIV-1 transmembrane protein gp41. In conjunction with computational analyses, we identified sequence similarities between the N-termini of GBV-C E2 and the HIV-1 glycoprotein gp120. This similarity appears to enable the GBV-C E2 N-terminus to interact with the HIV-1 gp41 disulfide loop, a crucial domain involved in the gp120-gp41 interface. Furthermore, the results of the present study provide initial proof of concept that peptides targeted to the gp41 disulfide loop are able to inhibit HIV fusion and should inspire the development of this new class of HIV-1 entry inhibitors.