A number of potential HIV protease inhibitory peptides that contain the dihydroxyethylene isostere were prepared and evaluated for their enzyme binding affinity and antiviral activity in cell cultures. From the template of a previously reported active peptide A, modifications at the N- and C-terminal groups were assessed for potential maintenance of good inhibitory activity of the resulting peptides. Among the active peptides found, peptide XVIII exhibited potent enzyme inhibitory activity. Interestingly, the previously reported, effective 1(S)-amino-2(R)-hydroxyindan C-terminal group for the preparation of very active HIV protease inhibitory peptides could not be applied to the template of peptide XVIII. Molecular modeling of peptide XVIII was studied using the X-ray crystal structure of peptide A as a starting point in order to study the likely conformation of peptide XVIII in the active-site cleft. Relative binding conformations of peptide A and XVIII were obtained, although the reason for poor binding affinity for a number of congeneric peptides in this report was not straightforwardly apparent. More importantly, however, peptide XVIII was found to exhibit more effective antiviral activity in the HIV-1/PBMC assay than the reference peptide A which was previously reported to be approximately equal in efficacy to the reverse transcriptase inhibitor AZT in this assay.