Interferons (IFNs) encode a family of secreted proteins that provide the front-line defence against viral infections. It was recently shown that ISG20, a new 3'-->5' exoribonuclease member of the DEDD superfamily of exonucleases, represents a novel antiviral pathway in the mechanism of IFN action. In this report, it was shown that ISG20 expression is rapidly and strongly induced during human immunodeficiency virus type 1 (HIV-1) infection. In addition, it was demonstrated that the replication kinetics of an HIV-1-derived virus expressing the ISG20 protein (HIV-1(NL4-3ISG20)) was delayed in both CEM cells and peripheral blood mononuclear cells. No antiviral effect was observed in cells overexpressing a mutated ISG20 protein defective in exonuclease activity, suggesting that the antiviral effect was due to the exonuclease activity of ISG20. Paradoxically, despite the antiviral activity of ISG20 protein, virus rescue observed in HIV-1(NL4-3ISG20)-infected cells was not due to mutation or partial deletion of the ISG20 transgene, suggesting that the virus was able to counteract the cellular defences. In addition, HIV-1-induced apoptosis was significantly reduced in HIV-1(NL4-3ISG20)-infected cells suggesting that emergence of HIV-1(NL4-3ISG20) was associated with the inhibition of HIV-1-induced apoptosis. Altogether, these data reflect the ineffectiveness of virus replication in cells overexpressing ISG20 and demonstrate that ISG20 represents a new factor in the IFN-mediated antiviral barrier against HIV-1.