A variety of molecules in human blood have been implicated in the inhibition of HIV-1. However, it remained elusive which circulating natural compounds are most effective in controlling viral replication in vivo. To identify natural HIV-1 inhibitors we screened a comprehensive peptide library generated from human hemofiltrate. The most potent fraction contained a 20-residue peptide, designated VIRUS-INHIBITORY PEPTIDE (VIRIP), corresponding to the C-proximal region of alpha1-antitrypsin, the most abundant circulating serine protease inhibitor. We found that VIRIP inhibits a wide variety of HIV-1 strains including those resistant to current antiretroviral drugs. Further analysis demonstrated that VIRIP blocks HIV-1 entry by interacting with the gp41 fusion peptide and showed that a few amino acid changes increase its antiretroviral potency by two orders of magnitude. Thus, as a highly specific natural inhibitor of the HIV-1 gp41 fusion peptide, VIRIP may lead to the development of another class of antiretroviral drugs.