The subject invention provides novel and advantageous methods for identifying amino acid sequences in random peptide libraries that can bind to Gag polypeptides. The subject invention also establishes a novel in vitro system that can be used to test competitive inhibitors of retroviral capsid assembly. Also provided are peptides, and compositions containing these peptides, which are inhibitors of the retrovirus Gag protein(s) function. Chimeric Gag polypeptides are also provided.