An artificial HIV-1 enhancer-binding 42-residue peptide (R42) that had been derived from bacteriophage 434 repressor inhibited the cell-free in vitro transcription of HIV-1 enhancer-containing plasmids [Hehlgans, T., Stolz, M., Klauser, S., Cui, T., Salgam, P., Brenz Verca, S., Widmann, M., Leiser, A., Stadler, K. & Gutte, B. (1993) FEES Lett. 315, 51-55; Caderas, G. (1997) PhD Thesis,University of Zurich]. Here we show that, after N-terminal extension of R42 with a viral nuclear localization signal, the resulting nucR42 peptide was active in intact:cells. NucR42 could be detected immunologically in nuclear extracts and produced a 60-70% reduction of the rate of transcription of an HIV-1 enhancer-carrying plasmid in COS-1 cells that had been cotransfected with the HIV enhancer plasmid, an expression plasmid for nucR42, and a control. NucR42 was also synthesized chemically and the synthetic product characterized by HPLC, mass spectrometry, and quantitative amino acid analysis. Band shift, footprint, and in vitro transcription assays in the presence of exogenous NF-kappa Bp50 indicated that the binding sites of nucR42 and NF-kappa B on the HIV enhancers overlapped and that a relatively small excess of nucR42 sufficed to displace NF-kappa Bp50. Band shift and in vitro transcription experiments showed also that exchange of the 434 repressor-derived nine-residue recognition helix of nucR42 for four glycines abolished the HIV enhancer binding specificity whereas leucine zipper- Or retro-leucine zipper-mediated dimerization of R42 analogues increased it suggesting the potential application of such dimeric HN enhancer-binding peptides as intracellular inhibitors of HIV replication.