The CD4 (T4) molecule is expressed on a subset of T lymphocytes involved in class II MHC recognition, and is probably the physiological receptor for one or more monomorphic regions of class II MHC (refs 1-3). CD4 also functions as a receptor for the human immunodeficiency virus (HIV) exterior envelope glycoprotein (gp120) (refs 4-9), being essential for virus entry into the host cell and for membrane fusion, which contributes to cell-to-cell transmission of the virus and to its cytopathic effects. We have used a baculovirus expression system to generate mg quantities of a hydrophilic extracellular segment of CD4. Concentrations of soluble CD4 in the nanomolar range, like certain anti-CD4 monoclonal antibodies, inhibit syncytium formation and HIV infection by binding gp120-expressing cells. Perhaps more importantly, class II specific T-cell interactions are uninhibited by soluble CD4 protein, whereas they are virtually abrogated by equivalent amounts of anti-T4 antibody. This may reflect substantial differences in CD4 affinity for gp120 and class II MHC.