Recent evidence indicates that the nef gene of human immunodeficiency virus type 1 augments rather than inhibits viral replication in both cell culture and in vivo models. In addition, nef alters various normal cellular processes, including the display of CD4 on the cell surface. However, it remains unknown whether the enhancement of infectivity and the downregulation of CD4 represent linked or independent biologic properties of this single protein. In the present studies, mutational analyses were performed to define structure-function relationships within the Nef protein that mediate these effects. To assess the functional consequences of these mutations, sensitive and reliable assays were developed to quantitate the viral infectivity enhancement and CD4 downregulation functions of Nef. The results indicate that membrane-targeting sequences at the N terminus of Nef are important for both functions of Nef, while certain other conserved regions are dispensable for both functions. A conserved proline-X-X repeat segment in the central core of the protein, which is reminiscent of an SH3-binding domain, is critical for the enhancement of infectivity function but is dispensable for CD4 downregulation. However, the downregulation of CD4 by Nef appears to involve a two-step process requiring the initial dissociation of p56lck from CD4 to permit engagement of the endocytic apparatus by CD4. Together, these findings demonstrate that the infectivity enhancement and CD4 downregulation activities of human immunodeficiency virus type 1 Nef can be dissociated. Thus, these processes may be independent of one another in the viral replication cycle.