Guanylate binding proteins (GBPs) are an interferon (IFN)-inducible subfamily of guanosine triphosphatases (GTPases) with well-established activity against intracellular bacteria and parasites. Here we show that GBP5 potently restricts HIV-1 and other retroviruses. GBP5 is expressed in the primary target cells of HIV-1, where it impairs viral infectivity by interfering with the processing and virion incorporation of the viral envelope glycoprotein (Env). GBP5 levels in macrophages determine and inversely correlate with infectious HIV-1 yield over several orders of magnitude, which may explain the high donor variability in macrophage susceptibility to HIV. Antiviral activity requires Golgi localization of GBP5, but not its GTPase activity. Start codon mutations in the accessory vpu gene from macrophage-tropic HIV-1 strains conferred partial resistance to GBP5 inhibition by increasing Env expression. Our results identify GBP5 as an antiviral effector of the IFN response and may explain the increased frequency of defective vpu genes in primary HIV-1 strains. Display omitted •GBP5 reduces HIV-1 infectivity by interfering with Env processing and incorporation•GBP5 expression levels determine infectious HIV-1 production in macrophages•Antiretroviral activity of GBP5 requires Golgi localization but not GTPase activity•Mutations in vpu reduce HIV-1 susceptibility to GBP5 by increasing Env expression GBPs are IFN-inducible guanosine triphosphatases important for cell-intrinsic immunity against bacteria and parasites. Krapp et al. demonstrate that GBP5, expressed in HIV-1 target cells, interferes with HIV-1 Env glycoprotein to potently suppress infectious virus yield. Vpu mutations in macrophage-tropic HIV-1 strains increase Env expression and confer partial resistance to GBP5.