Unusual HIV-1 nef alleles were isolated from a woman and her vertically infected child. Both patients eventually progressed to develop AIDS. The child died at age 6.5 years, while the mother is currently alive, 13 years since her diagnosis with HIV-1. Predicted amino acid sequences of both mother and child Nefs diverged from the HIV-1 clade B consensus. In particular, they exhibited two separate 5-amino acid deletions bracketing a C-terminal dileucine regulatory motif and Trp-Gly mutations at the site for cleavage by the HIV-1 protease. The child's Nef showed a modest ability to enhance HIV-1 infectivity in MAGI cells, whereas the mother's Nef did not alter HIV-1 infectivity in the assay. Both Nefs were partially functional for CD4 down-regulation. The child's Nef was fully functional for MHC-1 down-regulation, while the maternal Nef was non-functional. To our knowledge this study is the first to describe a functional divergence between Nef alleles in a case of mother-to-child HIV-1 transmission.