Because both HIV-1 virions and HIV-infected cells are present in the semen and cervical mucus of infected individuals, HIV-1 prevention strategies must consider both cell-free and cell-associated virus. Antibodies that target HIV-1 virions have been shown to prevent vaginal transmission of cell-free virus in macaques, but since cell-associated transmission has not been reliably demonstrated in this model system, no strategies to prevent such transmission have been tested. We have employed a mouse model in which SCID mice carry human peripheral blood leukocytes (HuPBLs). In these mice, vaginal transmission of cell-associated, but not cell-free, HIV-1 transmission occurs, mediated by transepithelial migration of HIV-infected cells. Topical application of beta-cyclodextrin (beta-CD), a cholesterol-sequestering agent that interferes with cell migration and budding of virus from lipid rafts, blocks transmission of cell-associated HIV-1. The HuPBL-SCID model of vaginal HIV-1 transmission should prove useful for investigating cell-associated HIV-1 transmucosal HIV-1 transmission, as well as for screening reagents for their potential efficacy in preventing sexual HIV-1 transmission.