The interaction of the chemokine stromal cell-derived factor 1 (SDF-1) with its receptor CXCR4 is vital for cell trafficking during development, is capable of inhibiting human immunodeficiency virus type 1 (HIV-1) utilization of CXCR4 as a coreceptor, and has been implicated in delaying disease progression to AIDS in vivo. Because of the importance of this chemokine-chemokine receptor pair to both development and disease, we investigated the molecular basis of the interaction between CXCR4 and its ligands SDF-1 and HIV-1 envelope. Using CXCR4 chimeras and mutants, we determined that SDF-1 requires the CXCR4 amino terminus for binding and activates downstream signaling pathways by interacting with the second extracellular loop of CXCR4. SDF-1-mediated activation of CXCR4 required the Asp-Arg-Tyr motif in the second intracellular loop of CXCR4, was pertussis toxin sensitive, and did not require the distal C-terminal tail of CXCR4. Several CXCR4 mutants that were not capable of binding SDF-1 or signaling still supported HIV-1 infection, indicating that the ability of CXCR4 to function as a coreceptor is independent of its ability to signal. Direct binding studies using the X4 gp120s HXB, BH8, and MN demonstrated the ability of HIV-1 gp120 to bind directly and specifically to the chemokine receptor CXCR4 in a CD4-dependent manner, using a conformationally complex structure on CXCR4. Several CXCR4 variants that did not support binding of soluble gp120 could still function as viral coreceptors, indicating that detectable binding of monomeric gp120 is not always predictive of coreceptor function.