Cultured monocyte-derived macrophages were productively infected with human immunodeficiency virus in vitro. Treatment of these cells shortly after infection and several times thereafter with the free form of MTP-PE had an inhibitory effect on virus production. When the liposomal formulation of MTP-PE was used, higher levels of protection were achieved. The drug was not only effective when added to cells immediately after infection, but it also reduced virus production by cells with an established infection. When the liposomal formulation of MTP-PE was used only one treatment was required to achieve maximal effects. During these studies it was noted that the placebo liposomes had some effect in reducing the reverse transcriptase levels found in the supernatants of infected cells. This reduction could not be explained by direct cytotoxic effect. Both free and liposomal MTP-PE lipid significantly prevented formation of giant cells during the course of infection as well as reduced the cell associated viral antigen.