The LTRs of all primate lentiviruses contain long U3 regions overlapping the nef gene. To assess the relevance of the modulatory U3 region for HIV-1 replication, we inactivated the T-rich region, the Polypurine tract and attachment (att) sequences in nef by silent mutations and inserted intact cis-regulatory elements just upstream of the core enhancer. These modifications severely truncated the U3 region and eliminated the nef overlap. The resulting HIV-1 mutants expressed functional Nef, replicated efficiently and caused CD4+ T cell depletion in ex vivo-infected lymphoid tissue suggesting that the modulatory U3 region might not be essential for efficient HIV-1 gene expression and AIDS pathogenesis.