The molecular and biological properties of HIV-1 subtype C strains from South Brazil were investigated. We sequenced gag and env fragments of viruses from 22 HIV-1-infected individuals from Porto Alegre City, which has the highest frequency of subtype C in the country. The sequences were then compared with other subtype B, C, and F strains isolated in Brazil and other countries using phylogenetic methods. Amino acid signatures were identified and correlated with phenotypic characteristics. We identified six strains with subtype C (27.3%), eight subtype B (36.4%), one subtype F (4.5%), six C/B recombinants (27.3%), and one B/F recombinant (4.5%). The Brazilian subtype C sequences formed a unique phylogenetic group and presented 6 and 18 specific amino acid signatures in gag and env, respectively. Three distinct patterns of C/B recombinants presented characteristic Brazilian amino acid substitutions. Subtype C viruses were predominantly R5 and non-syncytium-inducing, while C/B recombinants were R5/X4 and syncytium-inducing viruses. These findings suggest that subtype C viruses circulating in Brazil are the result of a unique introduction into the country. Recombination events between subtypes B and C have been occurring frequently for more than 10 years in South Brazil. Biological characterization confirms the hypothesis that subtype C is distinct from the others in the evolution of coreceptor utilization.