The human T-cell leukemia (lymphotropic) virus type III (HTLV-III) appears to be central to the causation of the acquired immune deficiency syndrome (AIDS). Two full-length integrated proviral DNA forms of HTLV-III have now been cloned and analyzed, and DNA sequences of the virus in cell lines and fresh tissues from patients with AIDS or AIDS-related complex (ARC) have been characterized. The results revealed that (i) HTLV-III is an exogenous human retrovirus, approximately 10 kilobases in length, that lacks nucleic acid sequences derived from normal human DNA; (ii) HTLV-III, unlike HTLV types I and II, shows substantial diversity in its genomic restriction enzyme cleavage pattern; (iii) HTLV-III persists in substantial amounts in cells as unintegrated linear DNA, an uncommon property that has been linked to the cytopathic effects of certain animal retroviruses; and (iv) HTLV-III viral DNA can be detected in low levels in fresh (primary) lymphoid tissue of a minority of patients with AIDS or ARC but appears not to be present in Kaposi's sarcoma tissue. These findings have important implications concerning the biological properties of HTLV-III and the pathophysiology of AIDS and Kaposi's sarcoma.