Poxviruses encode a number of secreted virulence factors that modulate the host immune response. The vaccinia virus A41 protein is an immunomodulatory protein with amino acid sequence similarity to the 35-kDa chemokine binding protein, but the host immune molecules targeted by A41 have not been identified. We report here that the vaccinia virus A41 ortholog encoded by ectromelia virus, a poxvirus pathogen of mice, named E163 in the ectromelia virus Naval strain, is a secreted 31-kDa glycoprotein that selectively binds a limited number of CC and CXC chemokines with high affinity. A detailed characterization of the interaction of ectromelia virus E163 with mutant forms of the chemokines CXCL10 and CXCL12alpha indicated that E163 binds to the glycosaminoglycan binding site of the chemokines. This suggests that E163 inhibits the interaction of chemokines with glycosaminoglycans and provides a mechanism by which E163 prevents chemokine-induced leukocyte migration to the sites of infection. In addition to interacting with chemokines, E163 can interact with high affinity with glycosaminoglycan molecules, enabling E163 to attach to cell surfaces and to remain in the vicinity of the sites of viral infection. These findings identify E163 as a new chemokine binding protein in poxviruses and provide a molecular mechanism for the immunomodulatory activity previously reported for the vaccinia virus A41 ortholog. The results reported here also suggest that the cell surface and extracellular matrix are important targeting sites for secreted poxvirus immune modulators.