Capsid-targeted viral inactivation is a novel protein-based strategy for the treatment of viral infections. Virus particles are inactivated by targeting toxic fusion proteins to virions, where they destroy viral components from within. We have fused Staphylococcus nuclease (SN) to the C-terminal end of Moloney murine leukemia virus Gag and demonstrated that expression of this fusion protein in chronically infected chicken embryo fibroblasts resulted in its incorporation into virions and subsequent inactivation of the virus particles by degradation of viral RNA. Release of particles incorporating Gag-SN fusion proteins into the extracellular milieu activates the nuclease and results in destruction of the virion from within. By comparing the effects of incorporated SN and SN*, an enzymatically inactive missense mutant form of SN, on the infectivity of virus particles, we have clearly demonstrated that nucleolytic activity is the antiviral mechanism. Expression of Gag-SN fusion proteins as a therapeutic agent causes a stable reduction of infectious titers by 20- to 60-fold. The antiviral effect of capsid-targeted viral inactivation in our model system, using both prophylactic and therapeutic approaches, suggests that a similar anti-human immunodeficiency virus strategy might be successful.