Wild-type HIV-1 is more infectious than nef-deleted HIV-1 in both limiting dilution and single-cycle infectivity assays. Moreover, Nef expression from a separate plasmid in the virus-producing cells is capable of restoring the infectivity of genetically nef-deficient HIV-1. These observations indicate that the virion itself is altered by Nef expression to promote viral infectivity. Sucrose gradient-purified HIV-1 virions contain full-length Nef protein and its inclusion is dependent on N-terminal myristylation of Nef. As myristylation-defective mutants of Nef do not enhance infectivity, incorporation of Nef into virions may mediate the enhanced infectivity. Studies with recombinant Nef have further shown that HIV-1 protease can cleave Nef into two polypeptides, a 20-kDa C-terminal core domain and a small N-terminal domain. Our analysis of purified HIV-1 virions also showed a 20-kDa form of Nef. The generation of this 20-kDa form of Nef was inhibited by an HIV-1 protease inhibitor, and its C-terminal core domain identity was confirmed through epitope-tagging. Immunoblots of virions demonstrated that 60-80% of the incorporated Nef is cleaved by the HIV-1 protease. This finding raised the possibility that the Nef core domain, which may no longer be tethered to the membrane due to absence of an N-terminal myristyl anchor, might mediate the enhanced infectivity. Therefore, a panel of mutants surrounding the proteolytic cleavage site in Nef were analyzed for effects on cleavage and enhancement of viral infectivity. Although some Nef mutants both failed to cleave and did not enhance viral infectivity, other mutants proved discordant in these functions. Specifically, two mutants that contained point mutations in the N-terminal domain cleaved normally, hence generating wild-type Nef core domain, yet failed to enhance infectivity. Thus, although the majority of the Nef protein in HIV-1 virions is cleaved by the viral protease into a 20-kDa C-terminal core domain, generation of this core domain of Nef appears insufficient to enhance HIV-1 infectivity. These findings suggest that protease cleavage of the Nef protein in virions is irrelevant for the infectivity function of Nef.