N6-methyladenosine (m6A) is the most abundant HIV RNA modification but the interplay between the m6A reader protein YTHDF3 and HIV replication is not well understood. We found that knockout of YTHDF3 in human CD4+ T-cells increases infection supporting the role of YTHDF3 as a restriction factor. Overexpression of the YTHDF3 protein in the producer cells reduces the infectivity of the newly produced viruses. YTHDF3 proteins are incorporated into HIV particles in a nucleocapsid-dependent manner permitting the m6A reader protein to limit infection in the new target cell at the step of reverse transcription. Importantly, HIV protease cleaves the virion-incorporated full-length YTHDF3 protein, a process which is blocked by HIV protease inhibitors used to treat HIV infected patients. Mass-spectrometry confirmed the proteolytic processing of YTHDF3 in the virion. Thus, HIV protease cleaves the virion-encapsidated host m6A effector protein in addition to the viral polyproteins to ensure optimal infectivity of the mature virion.