For most HIV-infected patients, antiretroviral therapy controls viral replication. However, in some patients drug resistance can cause therapy to fail. Nonetheless, continued therapy with a failing regimen can preserve or even lead to increases in CD4+ T cell counts. To understand the biological basis of these observations, we used mathematical models to explain observations made in patients with drug-resistant HIV treated with enfuvirtide (ENF/T-20), an HIV-1 fusion inhibitor. Due to resistance emergence, ENF was removed from the drug regimen, drug-sensitive virus regrown, and ENF was readministered. We used our model to study the dynamics of plasma-viral RNA and CD4+ T cell levels, and the competition between drug-sensitive and resistant viruses during therapy interruption and re-administration. Focusing on resistant viruses carrying the V38A mutation in gp41, we found ENF-resistant virus to be 1763% less fit than ENF-sensitive virus in the absence of the drug, and that the loss of resistant virus during therapy interruption was primarily due to this fitness cost. Using viral dynamic parameters estimated from these patients, we show that although re-administration of ENF cannot suppress viral load, it can, in the presence of resistant virus, increase CD4+ T cell counts, which should yield clinical benefits. This study provides a framework to investigate HIV and T cell dynamics in patients who develop drug resistance to other antiretroviral agents and may help to develop more effective strategies for treatment.