The cyclic urea inhibitors of HIV-1 protease generally have two hydroxyl groups on the seven-membered ring. In this study, free energy perturbation and continuum electrostatic calculations were used to study the contributions of the two hydroxyl groups to the binding affinity and solubility of a cyclic urea inhibitor DMP323. The results indicated that the inhibitor with one hydroxyl group has better binding affinity and solubility than the inhibitor with two hydroxyl groups. Therefore, removal of one hydroxyl group from DMP323 may help to improve the properties of DMP323. This is also likely to be true for other cyclic urea inhibitors. The study also illustrated the difficulty in accurate modeling of the binding affinities of HIV-1 protease inhibitors, which involves many possible protonation states of the two catalytic aspartic acids in the active site of the enzyme.