The cytopathic effects of human immunodeficiency virus type 1 (HIV-1) infection are specific for cells that express the CD4 viral receptor and consist of syncytium formation and single-cell lysis. Here we report that a mutation (517A) affecting the amino terminus of the HIV-1 gp41 transmembrane envelope glycoprotein resulted in a virus that was markedly less cytopathic than was wild-type HIV-1. In systems in which cell-to-cell transmission of HIV-1 occurred, the replication ability of the 517A virus was comparable with that of the wild-type virus. Even though the levels of viral protein expression, virion production, and interaction of the envelope glycoproteins with CD4 were similar for the 517A and wild-type viruses, both syncytium formation and single-cell lysis were attenuated for the 517A mutant virus. These results demonstrate that an envelope glycoprotein region important for mediating post-receptor binding events in cell membrane fusion is important for the induction of cytopathic effects by HIV-1. These results also indicate that levels of HIV-1 viral proteins or viral particles produced in infected cells are in themselves not sufficient to induce cytopathic effects.