In recent years, tremendous progress has been made in understanding the HIV-1 entry process in which the viral and cellular membranes are fused, resulting in the subsequent delivery of the viral genome into the host cell. The mechanistic insight gained from these studies has led to the formulation of exciting new approaches for therapeutic intervention. One of the first and clinically most advanced drugs to emerge from this effort is the fusion inhibitor T20. T20 acts by freezing a transient structural intermediate of the HIV-1 fusion process, thus blocking an essential step in viral entry. With phase III clinical trials already well underway, the success of T20 indicates that targeting of the viral entry process will soon be an important component of antiretroviral therapy. This review addresses this rapidly developing area of HIV research, with a focus on the mechanistic role of fusion inhibitors targeted to the HIV-1 gp41 transmembrane glycoprotein. We will review the results of recent clinical trials with T20 and discuss possible mechanisms of viral escape through the evolution of drug-resistant HIV-1 variants. We will also discuss ongoing research on fusion inhibitor susceptibility testing and the development of new improved fusion inhibitors.