Myristoylated 21- and 25-residue N-terminal peptides of the Nef protein of HIV-1 lysed human erythrocytes and were cytotoxic toward a human CD4+ T cell line, CEM, and primary human peripheral blood mononuclear cells (PBMCs). The corresponding nonmyristoylated N-terminal peptides were only very weakly hemolytic and cytotoxic. A myristoylated peptide consisting of residues 31-50 of Nef was neither hemolytic nor cytotoxic. Alteration of the tryptophan residue at position 13 to a serine did not change the hemolytic and cytotoxic activity. Studies of the ultraviolet fluorescence of the tryptophan at position 5 in the peptide, using an artificial membrane system and fluorescence-quenching agents that inserted into the bilayer at different levels, suggested that myristoylation results in this residue being brought into contact with the upper hydrocarbon region of the lipid bilayer of the cell membrane. This tryptophan is flanked by a number of polar residues that would maintain it in this position, resulting in a considerable increase in disorder in the upper regions of the lipid bilayer, leading to its destabilization and to lysis. The cytotoxic activity of the myristoylated Nef fragments may, in part, explain the killing and deletion of cells, especially in lymphoid tissues, during HIV infection.