APC infection and dysfunction may contribute to the immunopathogenesis of HIV disease. In this study, we examined immunologic function of highly enriched populations of HIV-infected monocyte-derived dendritic cells (DC). Compared with uninfected DC, HIV-infected DC markedly down-regulated surface expression of CD4. HIV p24(+) DC were then enriched by negative selection of CD4(+)HIV p24(-) DC and assessed for cytokine secretion and immunologic function. Although enriched populations of HIV-infected DC secreted increased IL-12p70 and decreased IL-10, these cells were poor stimulators of allogeneic CD4(+) T cell proliferation and IL-2 production. Interestingly, HIV-infected DC secreted HIV gp120 and the addition of soluble (s) CD4 (a known ligand for HIV gp120) to DC-CD4(+) T cell cocultures restored T cell proliferation in a dose-dependent manner. By contrast, addition of antiretroviral drugs did not affect CD4(+) T cell proliferation. Furthermore, recombinant HIV gp120 inhibited proliferation in uninfected cocultures of allogeneic DC and CD4(+) T cells, an effect that was also reversed by addition of sCD4. In summary, we show that HIV gp120 produced by DC infected by HIV in vitro impairs normal CD4(+) T cell function and that sCD4 completely reverses HIV gp120-mediated immunosuppression. We hypothesize that HIV-infected DC may contribute to impaired CD4(+) T cell-mediated immune responses in vivo and that agents that block this particular immunosuppression may be potential immune adjuvants in HIV-infected individuals.