The third variable region, V3, of the gp120 surface envelope glycoprotein is an approximately 35-residue-long, frequently glycosylated, highly variable, disulfide-bonded structure that has a major influence on HIV-1 tropism. Thus the sequence of V3, directly or indirectly, can determine which coreceptor (CCR5 or CXCR4) is used to trigger the fusion potential of the Env complex, and hence which cells the virus can infect. V3 also influences HIV-1's sensitivity to, and ability to escape from, entry inhibitors that are being developed as antiviral drugs. For some strains, V3 is a prominent target for HIV-1 neutralizing antibodies (NAbs); indeed, for many years it was considered to be the "principal neutralization determinant" (PND). Some efforts to use V3 as a vaccine target continue to this day, despite disappointing progress over more than a decade. Recent findings on the structure, function, antigenicity, and immunogenicity of V3 cast new doubts on the value of this vaccine approach. Here, we review recent advances in the understanding of V3 as a determinant of viral tropism, and discuss how this new knowledge may inform the development of HIV-1 drugs and vaccines.