We have characterized the mechanism for human immunodeficiency virus type 1 (HIV-1) latent infection in a human T cell line MOLT-4 subclone no. 8 (MOLT-#8). The inocula used were HIV-1 recovered from MT-4 during the acute (NL-A) and persistent (NL-P) phases after HIV-1 infection. On infection of MOLT-#8 with NL-A, viral antigens first appeared in almost 100% of the cells whereafter the numbers of viable antigen-positive cells declined. In contrast, following infection with NL-P the expression of viral antigens was maintained in almost 100% of the cells. In fact, limiting dilution of NL-P-infected cells allowed us to isolate 43 subclones, all of which were positive for viral antigen expression in almost 100% of the cells (type I). In sharp contrast, only two of 41 subclones from NL-A-infected cells were of type I. Seven subclones were latently infected with HIV-1; latent HIV-1 in six subclones (type II), but not in one type III subclone, was activated by tumour necrosis factor (TNF)-alpha or phorbol 12-myristate 13-acetate. The remaining subclones were negative for the viral genome. Of particular note is the effect of endogenous TNF-alpha generated during the acute phase of virus replication which shifted the virus phenotype. Thus, the presence of TNF-alpha during the acute phase of virus replication seems to play a key role in the selective destruction of cells expressing higher levels of viral antigens and in subsequent establishment of latent infection in host T cells.