We have isolated a lymphoid cell line, MDS, from the pleural exudate of a patient with chronic myelomonocytic leukemia. The cells are biphenotypic, containing various T-cell and myeloid markers, and are surface negative for CD4 and CD8 but have low CD4 mRNA. The cells grow in suspension with a doubling time of 15 hr, have been karyotyped as trisomy 21, are negative for human immunodeficiency virus type 1 (HIV-1), and are tumorigenic in the nude mouse. We have isolated two stable HIV-1-producing cell lines, MDS-T, by transfecting MDS cells with pHXBc2, and MDS-I, by infecting MDS cells with HIV-1IIIB. In 24 hr, 1 x 10(5) MDS-T or MDS-I cells produce 46 ng of p24 per ml and reverse transcriptase that is capable of incorporating 0.2 pmol of [32P]TTP into oligo(dT).poly(A). Ultrastructural studies showed numerous mature viral particles in MDS-T and MDS-I cells that are capable of infecting T cells. HIV-1 infection could be inhibited by 25% in the MDS cells with the anti-CD4 antibody Leu 3a. For over a year MDS-T and MDS-I cells have been producing high concentrations of HIV-1 in culture. A subclone derived from the MDS cells behaves like the parent cells when transfected or infected with HIV-1. In contrast to other T-cell lines, neither phorbol 12-myristate 13-acetate nor tumor necrosis factor alpha stimulated the replication of HIV-1, whereas bromoadenosine 3',5'-cyclic monophosphate or interferon alpha caused 50% and 80% inhibition of reverse transcriptase production, respectively. These chronically infected T-cell lines are a useful model system to study the effect of anti-HIV agents and cellular factors required for HIV-1 replication.