M-tropic HIV strains gain access to their host cell via interaction of the viral envelope protein gp120 with the CCR5 coreceptor and CD4 located on the host cell. Inhibition of this event has been shown to reduce viral fusion and entry into cells in vitro. In the present study we describe the development of a novel cell/cell fusion assay that both mimics the viral/cell fusion process and allows quantification of this event. The assay has been characterized both biochemically, using selective antibodies, and pharmacologically, using selective CCR5 antagonists, and has been shown to be selective for examining the interaction of viral gp120 with hCCR5/hCD4. In addition, compound pIC50 data obtained from this cell/cell fusion assay correlates well (r2 = 0.7274) with data obtained from an HIV-1 replication assay. Furthermore, this assay has the added ability to simultaneously determine compound toxicity, thus allowing rapid determination of active, non-toxic compounds. In conclusion, the cell/cell fusion assay developed has been demonstrated to be a suitable surrogate assay that can be used to assess the effects of compounds on gp120/CCR5/CD4 mediated viral fusion into host cells.