We previously reported that monoclonal antibodies to protein-disulfide isomerase (PDI) and other membrane-impermeant PDI inhibitors prevented HIV-1 infection. PDI is present at the surface of HIV-1 target cells and reduces disulfide bonds in a model peptide attached to the cell membrane. Here we show that soluble PDI cleaves disulfide bonds in recombinant envelope glycoprotein gp120 and that gp120 bound to the surface receptor CD4 undergoes a disulfide reduction that is prevented by PDI inhibitors. Concentrations of inhibitors that prevent this reduction and inhibit the cleavage of surface-bound disulfide conjugate prevent infection at the level of HIV-1 entry. The entry of HIV-1 strains differing in their coreceptor specificities is similarly inhibited, and so is the reduction of gp120 bound to CD4 of coreceptor-negative cells. PDI inhibitors also prevent HIV envelope-mediated cell-cell fusion but have no effect on the entry of HIV-1 pseudo-typed with murine leukemia virus envelope. Importantly, PDI coprecipitates with both soluble and cellular CD4. We propose that a PDI.CD4 association at the cell surface enables PDI to reach CD4-bound virus and to reduce disulfide bonds present in the domain of gp120 that binds to CD4. Conformational changes resulting from the opening of gp120-disulfide loops may drive the processes of virus-cell and cell-cell fusion. The biochemical events described identify new potential targets for anti-HIV agents.