In preclinical and phase I and II clinical studies, 2'-deoxy-2'-β-fluoro-4'-azidocytidine (FNC) displays a potent and long-lasting inhibition of HIV-1 infection. To investigate its mechanism of action, we compared it with the well-documented lamivudine (3TC). Pharmacokinetic studies revealed that the intracellular retention of FNC triphosphate in peripheral blood mononuclear cells was markedly longer than that of the 3TC triphosphate. FNC selectively enters and is retained in HIV target cells, where it exerts long-lasting prevention of HIV-1 infection. In addition to inhibition of HIV-1 reverse transcription, FNC also restores A3G expression in CD4<sup>+</sup> T cells in FNC-treated HIV-1 patients. FNC binds to the Vif-E3 ubiquitin ligase complex, enabling A3G to avoid Vif-induced ubiquitination and degradation. These data reveal the mechanisms underlying the superior anti-HIV potency and long-lasting action of FNC. Our results also suggest a potential clinical application of FNC as a long-lasting pre-exposure prophylactic agent capable of preventing HIV infection.