Acquired immune deficiency syndrome (AIDS) is an epidemic immunosuppressive disease characteristically associated with a depletion of T lymphocytes of the helper/inducer phenotype1. Numerous converging lines of research have implicated a human T-cell lymphotropic retrovirus, HTLV-III, in the pathogenesis of AIDS2-5. Recently, several distinct forms of the HTLV-III genome were molecularly cloned in phage and extensively characterized6,7. In the present study, a clone containing full-length HTLV-III proviral DNA7 was inserted into a plasmid and used to transfect cord blood T cells from normal newborn humans. We demonstrate that this molecular clone is infectious in vitro and causes marked cytopathic effects on T-cell cultures. This is the first direct evidence that the HTLV-III genome, rather than a minor component of the virus complex, is cytopathic for T cells. Using this biologically competent clone and mutants derived from it, it should now be possible to localize the subgenomic regions that contribute to the biological effects of HTLV-III.