The HIV-1 transframe region (TFR) is between the structural and functional domains of the Gag-Pol polyprotein, flanked by the nucleocapsid and the protease domains at its N and C termini, respectively. Transframe octapeptide (TFP) Phe-Leu-Arg-Glu-Asp-Leu-Ala-Phe, the N terminus of TFR, and its analogues are competitive inhibitors of the action of the mature HIV-1 protease. The smallest, most potent analogues are tripeptides: Glu-Asp-Leu and Glu-Asp-Phe with Ki values of approximately 50 and approximately 20 microM, respectively. Substitution of the acidic amino acids in the TFP by neutral amino acids and d or retro-d configurations of Glu-Asp-Leu results in an >40-fold increase in Ki. Protease inhibition by Glu-Asp-Leu is dependent on a protonated form of a group with a pKa of 3.8; unlike other inhibitors of HIV-1 protease which are highly hydrophobic, Glu-Asp-Leu is extremely soluble in water, and its binding affinity decreases with increasing NaCl concentration. However, Glu-Asp-Leu is a poor inhibitor (Ki approximately 7.5 mM) of the mammalian aspartic acid protease pepsin. X-ray crystallographic studies at pH 4.2 show that the interactions of Glu at P2 and Leu at P1 of Glu-Asp-Leu with residues of the active site of HIV-1 protease are similar to those of other product-enzyme complexes. It was not feasible to understand the interaction of intact TFP with HIV-1 protease under conditions of crystal growth due to its hydrolysis giving rise to two products. The sequence-specific, selective inhibition of the HIV-1 protease by the viral TFP suggests a role for TFP in regulating protease function during HIV-1 replication.