One mechanism of the immune suppression in HIV infection has been postulated as being caused by the interaction of HIV envelope glycoprotein gp120 with CD4 molecules. Thus, pretreatment of purified peripheral blood T cells or CD4+ T cell clones with gp120 (or an anti-CD4 mAb) results in inhibition of anti-CD3 mAb-induced proliferative responses. In this study, we have analyzed the role of the interacting pairs of costimulatory molecules, CD28-B71 (CD80) and CD40 ligand (CD40L)-CD40, to elucidate further the mechanism of HIV gp120-induced inhibitory effects on T cell functions. Interactions between CD28-B71 and CD40L-CD40 were found to be essential for the anti-CD3 mAb-induced T cell proliferation, as demonstrated by up-regulation of B71 and CD40L and the ability of anti-B71 and anti-CD40L mAbs to inhibit this response. Pretreatment of CD4+ T cells with gp120 before CD3 ligation with anti-CD3 mAb resulted in failure of up-regulation of CD40L on T cells and B71 on APC. Exogenous addition of anti-CD28 mAb overcame the inhibitory effect of gp120 on anti-CD3 mAb-induced T cell proliferation. We conclude that binding of gp120 to CD4 molecules on T cells may interrupt the sequential cascade of intercellular interaction involving 1) Ag/MHC class II-TCR/CD4, 2) CD40L-CD40, and 3) B71-CD28. These studies indicate that the CD4-gp120 interaction results in dysregulation of expression of costimulatory molecules, CD40L, and B71 expression on T cells and APC, respectively, thereby contributing to the T cell hyporesponsiveness in HIV infection.