Recent data on the phenotype of nef-defective HIV-1 in vitro indicate a new function of the Nef gene product: enhancement of viral infectivity. Single-cycle replication studies have suggested that Nef enhances the efficiency of an early step during viral replication, a step that leads to the establishment of viral DNA. To test this interpretation, the accumulation of low-molecular-weight (unintegrated) viral DNA was measured in cells following exposure to wild-type and nef-defective viruses. nef-defective virus accumulated less DNA than the wild type. This difference was observed after as little as 5 hr of exposure to virus. However, the reverse transcriptase activities of wild-type and nef-defective viruses were equal when measured in cell-free assays using either exogenous or endogenous templates. In addition, the abilities of these viruses to bind and enter cells were not significantly different. Together, these data suggest that Nef optimizes postentry events that are required for efficient synthesis of viral DNA. To determine if these effects were related to the property of Nef-mediated downregulation of CD4, growth curves of these viruses were determined using cells that express a CD4 molecule unable to respond to Nef. nef-defective virus remained attenuated in these cells, indicating that Nef-mediated downregulation of CD4 is not required for Nef-mediated enhancement of viral propagation in vitro.