Peptides derived from the C-terminal heptad repeat 2 region of the HIV-1 gp41 envelope glycoprotein, so-called C peptides, are very potent HIV-1 fusion inhibitors. Antiviral genes encoding either membrane-anchored (ma) or secreted (iSAVE) C peptides have been engineered and allow direct in vivo production of the therapeutic peptides by genetically modified host cells. Membrane-anchored C peptides expressed in the HIV-1 target cells by T-cell or hematopoietic stem cell gene therapy efficiently prevent virus entry into the modified cells. Such gene-protection confers a selective survival advantage and allows accumulation of the genetically modified cells. Membrane-anchored C peptides have been successfully tested in a nonhuman primate model of AIDS and were found to be safe in a phase I clinical trial in AIDS patients transplanted with autologous gene-modified T-cells. Secreted C peptides have the crucial advantage of not only protecting genetically modified cells from HIV-1 infection, but also neighboring cells, thus suppressing virus replication even if only a small fraction of cells is genetically modified. Accordingly, various cell types can be considered as potential in vivo producer cells for iSAVE-based gene therapeutics, which could even be modified by direct in vivo gene delivery in future. In conclusion, C peptide gene therapeutics may provide a strong benefit to AIDS patients and could present an effective alternative to current antiretroviral drug regimens.