The envelope glycoprotein (gp120/41) of the human immunodeficiency virus (HIV-1) attaches the virus to the cellular CD4 receptor and mediates virus entry into the cytoplasm. In addition to being required for formation of infectious HIV, expression of gp120/41 at the plasma membrane causes the cytopathic fusion of cells carrying the CD4 antigen. The expression of gp120/41 is therefore an ideal target for therapeutic strategies designed to combat AIDS. Here we show that expression of a soluble CD4 molecule, mutated to contain a specific retention signal for the endoplasmic reticulum, blocks secretion of gp120 and surface expression of gp120/41, but does not interfere with transport of wild-type CD4. By blocking transport of the HIV glycoprotein, this retained CD4 molecule prevents the fusion of CD4 cells that is normally caused by the HIV glycoprotein. Expression of the retained CD4 molecule in human T cells might therefore be useful in the intracellular immunization procedure suggested by Baltimore.