Lymphocytes infected in vivo with HIV or lymphoblastoid cells exposed in vitro to either HIV or its envelope glycoprotein (gp120) show a defect in inositol polyphosphate-mediated signal transduction together with an associated abnormality in intracellular calcium regulation. The defect in patients reverses after treatment with the anti-retroviral agent zidovudine (AZT). We present evidence that the defect is at the level of the Ins (1,3,4,5)P4 5-phosphomonoesterase (PME) in these cells and that, though elevation of the intracellular ATP level partially down-regulates the activity of this enzyme, such changes alone are unable to account for the complete inhibition seen in HIV-infected cells.