The outer domain (OD) of the HIV-1 envelope glycoprotein gp120 is an important target for vaccine design as it contains a number of conserved epitopes, including a large fraction of the CD4 binding site. Attempts to design OD-based immunogens in the past have met with little success. We report the design and characterization of an Escherichia coli-expressed OD-based immunogen (OD(EC)), based on the sequence of the HxBc2 strain. The OD(EC)-designed immunogen lacks the variable loops V1V2 and V3 and incorporates 11 designed mutations at the interface of the inner and the outer domains of gp120. Biophysical studies showed that OD(EC) is folded and protease-resistant, whereas OD(EC) lacking the designed mutations is highly aggregation-prone. In contrast to previously characterized OD constructs, OD(EC) bound CD4 and the broadly neutralizing antibody b12 but not the non-neutralizing antibodies b6 and F105. Upon immunization in rabbits, OD(EC) was highly immunogenic, and the sera showed measurable neutralization for four subtype B and one subtype C virus including two b12-resistant viruses. In contrast, sera from rabbits immunized with gp120 did not neutralize any of the viruses. OD(EC) is the first example of a gp120 fragment-based immunogen that yields significant neutralizing antibodies.