Poxviruses encode soluble cytokine receptors to interfere with host immune functions. Cells infected with vaccinia virus (VV) strains USSR, Lister, and Evans express soluble and cell surface tumor necrosis factor receptors (vTNFRs). We have characterized vTNFR activity in VV USSR and identified an open reading frame that encodes both soluble and cell surface activity, hereafter referred to as VV cytokine response modifier E (VV CrmE). Expression and characterization from recombinant VV and baculovirus showed VV CrmE to be an 18-kDa protein that bound human, mouse, and rat TNF-alpha, but not human LT alpha. VV CrmE inhibited the cytotoxic and apoptotic activities of human, but not mouse or rat, TNF in vitro. Nonetheless, in a murine intranasal model, USSR recombinants lacking CrmE were attenuated, demonstrating a role in vivo. Furthermore, expression of VV or cowpox virus vTNFRs from VV strain WR (which itself does not express a vTNFR) was shown to enhance virulence in the murine model.