N4-hexadecyl-5′-0-(4-monomethoxytrityl)-2′-deoxycytidine-3′-hydrogenphosphonate and 5′-0-(4-monomethoxytrityl)-2′-deoxythymidine-3′-0-hydrogenphosphonate were condensed with 2′,3′-dideoxycytidine (ddC) according to the hydrogenphosphonate method to yield N4-hexadecyl-2′-deoxycytidylyl-(3′-5′)-2′,3′-dideoxycytidine (N4-hexadecyldC-ddC) and 2′-deoxythymidylyl-(3′-5′)-N4-palmitoyl-2′,3′-dideoxycytidine (dT-N4-palmddC). N4-palmitoyl-2′,3′-dideoxycytidine (N4-palmddC) was synthesized by reacting palmitic anhydride with ddC. Both dinucleoside phosphates have amphiphilic properties and represent a new class of ddC derivatives in which in the case of the dinucleosides, the ddC-5′-monophosphate is masked with lipophilic residues of variable stability. The ddC derivatives can be solubilized in water by micelle formation and, because they have lipophilic residues, they can be incorporated into the lipid membranes of liposomes. The ddC derivatives were shown to have antiviral activities comparable to those of AZT and ddC when tested in vitro against HIV-1-infected HeLa and H9 cells as well as infected human monocytes/macrophages.