Monocyte-derived macrophages (MDM) infected in vitro with a macrophage-tropic strain of human immunodeficiency virus (HIV) fused with uninfected, CD4-expressing T lymphoblastoid cells, but not with a subclone of these cells lacking surface CD4. Infected MDM also fused with uninfected autologous and heterologous MDM. Recombinant soluble CD4 protein (rsCD4) (10 micrograms/ml) and full-length recombinant glycosylated gp120 (20 micrograms/ml) each inhibited fusion by 94-99%; the inhibition was dose-dependent. The N-terminal portion of gp120 did not inhibit syncytium formation. Fusion was also inhibited by a monoclonal antibody to an epitope which binds gp120 (S3.5), but not by antibody to an epitope not involved in gp120 binding (OKT4). HIV-infected MDM specifically bound fluorescein-conjugated rsCD4, and virus could be visualized budding from the surface of these cells. HIV-infected MDM express viral gp120 on their surface and fuse with CD4-bearing cells in a fashion similar to lymphoid cells. Macrophages may contribute to CD4 lymphocyte depletion in vivo by this fusion mechanism.