High-resolution X-ray structures of the complexes of HIV-1 protease (HIV-1PR) with peptidomimetic inhibitors reveal the presence of a structural water molecule which is hydrogen bonded to both the mobile flaps of the enzyme and the two carbonyls flanking the transition-state mimic of the inhibitors. Using the structure-activity relationships of C2-symmetric diol inhibitors, computed-aided drug design tools, and first principles, we designed and synthesized a novel class of cyclic ureas that incorporates this structural water and preorganizes the side chain residues into optimum binding conformations. Conformational analysis suggested a preference for pseudodiaxial benzylic and pseudodiequatorial hydroxyl substituents and an enantiomeric preference for the RSSR stereochemistry. The X-ray and solution NMR structure of the complex of HIV-1PR and one such cyclic urea, DMP323, confirmed the displacement of the structural water. Additionally, the bound and "unbound" (small-molecule X-ray) ligands have similar conformations. The high degree of preorganization, the complementarity, and the entropic gain of water displacement are proposed to explain the high affinity of these small molecules for the enzyme. The small size probably contributes to the observed good oral bioavailability in animals. Extensive structure-based optimization of the side chains that fill the S2 and S2' pockets of the enzyme resulted in DMP323, which was studied in phase I clinical trials but found to suffer from variable pharmacokinetics in man. This report details the synthesis, conformational analysis, structure-activity relationships, and molecular recognition of this series of C2-symmetry HIV-1PR inhibitors. An initial series of cyclic ureas containing nonsymmetric P2/P2' is also discussed.