This study reports on the direct effect of the envelope glycoprotein (gp120) of the human immunodeficiency virus type 1 (HIV-1) on human monocyte function. Addition of preparations of purified gp120 from the HIV-1 to human monocytes resulted in the production of interleukin 1 (IL-1) and arachidonic acid metabolites from the cyclooxygenase and lipoxygenase pathways. Quantification of prostaglandin E2 (PGE2) and IL-1 revealed an increase in both mediators with 50 ng of gp120 per ml and an increase of 12- and 30- to 40-fold with 200-400 ng of gp120 per ml, respectively. Unlike native gp120, the recombinant nonglycosylated gp120 fragments PB1-RF and PB1-IIIB, as well as one of the core structural proteins of HIV-1, p24, did not increase arachidonic acid metabolism or IL-1 activity. Cytofluorometric analysis revealed that gp120 blocked the binding of OKT4A to the CD4 on monocytes, whereas OKT4 binding was unaffected. Involvement of the CD4 in signal transduction was further demonstrated by the ability of OKT4 and OKT4A monoclonal antibodies to increase monocyte PGE2, IL-1 activity, and nanogram amounts of IL-1 beta.