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Background: Mutations in the substrate of HIV-1 protease, especially changes in the NC/p1 cleavage site, can directly contribute to protease inhibitor (PI) resistance and also compensate for defects in viral replicative capacity (RC) due to a drug resistant protease. These NC/p1 changes are known to enhance processing of the Gag protein. To investigate the capacity of HIV-1 to modulate Gag cleavage and its consequences for PI resistance and RC, we performed a detailed enzymatic and virological analysis using a set of PI resistant NC/p1 variants (HXB2(431V), HXB2(436E+437T), HXB2(437T) and HXB2(437V)). Results: Here, we demonstrate that single NC/p1 mutants, which displayed only a slight increase in PI resistance did not show an obvious change in RC. In contrast, the double NC/p1 mutant, which displayed a clear increase in processing efficiency and PI resistance, demonstrated a clear reduction in RC. Cleavage analysis showed that a tridecameric NC/p1 peptide representing the double NC/p1 mutant was cleaved in two specific ways instead of one. The observed decrease in RC for the double NC/p1 mutant (HXB2(436E+437T)) could (partially) be restored by either reversion of the 436E change or by acquisition of additional changes in the NC/p1 cleavage site at codon 435 or 438 as was revealed during in vitro evolution experiments. These changes not only restored RC but also reduced PI resistance levels. Furthermore these changes normalized Gag processing efficiency and obstructed the novel secondary cleavage site observed for the double NC/p1 Conclusions: The results of this study clearly demonstrate that HIV-1 can modulate Gag processing and thereby PI resistance. Distinct increases in Gag cleavage and PI resistance result in a reduced RC that can only be restored by amino acid changes in NC/p1 which reduce Gag processing to an optimal rate.