A single-chain antibody, derived from a human monoclonal antibody that recognizes the CD4 binding region of the human immunodeficiency virus type 1 (HIV-1) envelope protein, has been designed for intracellular expression in eukaryotic cells. The single-chain antibody is composed of an immunoglobulin heavy-chain leader sequence and heavy- and light-chain variable regions that are joined by an interchain linker. The antibody is stably expressed and retained in the endoplasmic reticulum and is not toxic to the cells. The antibody binds to the envelope protein within the cell and inhibits processing of the envelope precursor and syncytia formation. The infectivity of the HIV-1 particles produced by cells that express the single-chain antibody is substantially reduced. These studies illustrate the feasibility of designing antibodies that bind and inactivate molecules intracellularly. Antibodies that act on target molecules within cells should provide a useful tool for research as well as for control of infectious and other diseases.