An infectious molecular clone of simian immunodeficiency virus SIVsm was derived from a biological isolate obtained late in disease from an immunodeficient rhesus macaque (E543) with SIV-induced encephalitis. The molecularly cloned virus, SIVsmE543-3, replicated well in macaque peripheral blood mononuclear cells and monocyte-derived macrophages and resisted neutralization by heterologous sera which broadly neutralized genetically diverse SIV variants in vitro. SIVsmE543-3 was infectious and induced AIDS when inoculated intravenously into pig-tailed macaques (Macaca nemestrina). Two of four infected macaques developed no measurable SIV-specific antibody and succumbed to a wasting syndrome and SIV-induced meningoencephalitis by 14 and 33 weeks postinfection. The other two macaques developed antibodies reactive in Western blot and virus neutralization assays. One macaque was sacrificed at 1 year postinoculation, and the survivor has evidence of immunodeficiency, characterized by persistently low CD4 lymphocyte subsets in the peripheral blood. Plasma samples from these latter animals neutralized SIVsmE543-3 but with much lower efficiency than neutralization of other related SIV strains, confirming the difficulty by which this molecularly cloned virus is neutralized in vitro. SIVsmE543-3 will provide a valuable reagent for studying SIV-induced encephalitis, mapping determinants of neutralization, and determining the in vivo significance of resistance to neutralization in vitro.