BMS-378806 is a recently discovered small-molecule human immunodeficiency virus type 1 (HIV-1) attachment inhibitor with good antiviral activity and pharmacokinetic properties. Here, we demonstrate that the compound targets viral entry by inhibiting the binding of the HIV-1 envelope gp120 protein to cellular CD4 receptors via a specific and competitive mechanism. BMS-378806 binds directly to gp120 at a stoichiometry of approximately 1:1, with a binding affinity similar to that of soluble CD4. The potential BMS-378806 target site was localized to a specific region within the CD4 binding pocket of gp120 by using HIV-1 gp120 variants carrying either compound-selected resistant substitutions or gp120-CD4 contact site mutations. Mapping of resistance substitutions to the HIV-1 envelope, and the lack of compound activity against a CD4-independent viral infection confirm the gp120-CD4 interactions as the target in infected cells. BMS-378806 therefore serves as a prototype for this new class of antiretroviral agents and validates gp120 as a viable target for small-molecule inhibitors.