Objective: To describe the effect of zidovudine on human immunodeficiency virus type 1 (HIV-1) and on the course of disease in infants who became infected while they and their mothers received zidovudine preventive therapy or placebo in Pediatric AIDS Clinical Trials Group Protocol 076. Study design: Observational substudy of a multicenter, randomized, double-blind, placebo-controlled trial. Methods: We compared the progression of disease, timing of HIV-1 transmission, and the plasma HIV-1 RNA level in infected infants of mother-infant pairs who were randomly assigned to receive zidovudine (n = 14) or placebo (n = 43). The development of genotypic zidovudine resistance was assessed among infected infants in the zidovudine treatment group. Results: In this limited study, zidovudine therapy during pregnancy and labor and in the neonatal period for 6 weeks failed to have a major effect on rapid progression of disease, timing of transmission, and vital replication in HIV-infected infants. When the zidovudine treatment regimen failed to prevent maternal-infant transmission of HIV-1, resistance to zidovudine did not develop during study treatment. Conclusions: Our study supports the safety of zidovudine use in pregnancy and in the newborn period but demonstrates the continued need for more potent antiretroviral treatment of the infected infant.