Broadly neutralizing antibodies (bnAbs) to HIV-1 can evolve after years of an iterative process of virus escape and antibody adaptation that HIV-1 vaccine design seeks to mimic. To enable this, properties that render HIV-1 envelopes (Env) capable of eliciting bnAb responses need to be defined. Here, we followed the evolution of the V2 apex directed bnAb lineage VRC26 in the HIV-1 subtype C superinfected donor CAP256 to investigate the phenotypic changes of the virus populations circulating before and during the early phases of bnAb induction. Longitudinal viruses that evolved from the VRC26-resistant primary infecting (PI) virus, the VRC26-sensitive superinfecting (SU) virus and ensuing PI-SU recombinants revealed substantial phenotypic changes in Env, with a switch in Env properties coinciding with early resistance to VRC26. Decreased sensitivity of SU-like viruses to VRC26 was linked with reduced infectivity, altered entry kinetics and lower sensitivity to neutralization after CD4 attachment. VRC26 maintained neutralization activity against cell-associated CAP256 virus, indicating that escape through the cell-cell transmission route is not a dominant escape pathway. Reduced fitness of the early escape variants and sustained sensitivity in cell-cell transmission are both features that limit virus replication, thereby impeding rapid escape. This supports a scenario where VRC26 allowed only partial viral escape for a prolonged period, possibly increasing the time window for bnAb maturation. Collectively, our data highlight the phenotypic plasticity of the HIV-1 Env in evading bnAb pressure and the need to consider phenotypic traits when selecting and designing Env immunogens. Combinations of Env variants with differential phenotypic patterns and bnAb sensitivity, as we describe here for CAP256, may maximize the potential for inducing bnAb responses by vaccination.