SDZ NIM 811 is a cyclosporin A analog that is completely devoid of immunosuppressive capacity but exhibits potent and selective anti-human immunodeficiency virus type 1 (HIV-1) activity. The mechanism of action of SDZ NIM 811 is clearly different from those of all other anti-HIV agents described so far. In cell-free assays, it is not an inhibitor of reverse transcriptase, protease, integrase, and it does not interfere with Rev or Tat function. SDZ NIM 811 does not down-regulate CD4 or inhibit fusion between infected and uninfected, CD4-expressing cells. p24 production from chronically HIV-infected cells is not impaired either. To elucidate the mode of action of SDZ NIM 811, we performed DNA PCR analysis in HIV-1 IIIB-infected MT4 cells in one cycle of virus replication. The effects of SDZ NIM 811 on the kinetics of viral DNA synthesis, appearance of two-long terminal repeat circles (2-LTR circles), and integration of DNA were studied. SDZ NIM 811 inhibited 2-LTR circle formation in a concentration-dependent manner, which is indicative of nuclear localization of preintegration complexes. Half-maximal inhibition was achieved at 0.17 microgram/ml; this concentration is close to the 50% inhibitory concentrations (0.01 to 0.2 microgram/ml) for viral growth inhibition. As expected, integration of proviral DNA into cellular DNA was also inhibited by SDZ NIM 811. Analysis of the viral particles produced by SDZ NIM 811-treated, chronically infected cells revealed amounts of capsid proteins, reverse transcriptase activity, and viral RNA comparable to those of the untreated control. However, these particles showed a dose-dependent reduction in infectivity (50% inhibitory concentration of 0.028 microgram/ml) which indicates that the assembly process is also impaired by SDZ NIM 811. Gag proteins are postulated to play a role not only in assembly but also in early steps of viral replication, e.g., nuclear localization of the preintegration complex. Recently, it was reported that HIV-1 Gag protein binds to cyclophilin A, the intracellular receptor for cyclosporin A. Interference with Gag-cyclophilin interaction may be the molecular basis for the antiviral activity of cyclosporin A and its analogs.