Macrophages constitute an important reservoir of HIV-1 infection, yet HIV-1 entry into these cells is poorly understood due to the difficulty in genetically manipulating primary macrophages. We developed an effective genetic approach to manipulate the sub-cellular distribution of CD4 in macrophages, and investigated how this affects the HIV-1 entry pathway. Pluripotent Stem Cells (PSC) were transduced with lentiviral vectors designed to manipulate CD4 location and were then differentiated into genetically modified macrophages. HIV-1 infection of these cells was assessed by performing assays that measure critical steps of the HIV-1 lifecycle (fusion, reverse transcription, and expression from HIV-1 integrants). Expression of LCK (which tethers CD4 to the surface of T cells, but is not normally expressed in macrophages) in PSC-macrophages effectively tethered CD4 at the cell surface, reducing its normal endocytic recycling route, and increasing surface CD4 expression 3-fold. This led to a significant increase in HIV-1 fusion and reverse transcription, but productive HIV-1 infection efficiency (as determined by reporter expression from DNA integrants) was unaffected. This implies that surface-tethering of CD4 sequesters HIV-1 into a pathway that is unproductive in macrophages. Secondly, to investigate the importance of lipid rafts (as detergent resistant membranes - DRM) in HIV-1 infection, we generated genetically modified PSC-macrophages that express CD4 mutants known to be excluded from DRM. These macrophages were significantly less able to support HIV-1 fusion, reverse-transcription and integration than engineered controls. Overall, these results support a model in which productive infection by HIV-1 in macrophages occurs via a CD4-raft-dependent endocytic uptake pathway.