A novel 2986 base transcript encoded by the antisense strand of the HRES-1 human endogenous retrovirus was isolated from peripheral blood lymphocytes (PBL). This transcript codes for a 218 amino acid protein, termed HRES-1/Rab4, based on homology to the Rab4 family of small GTP-ases. Antibody 13407 raised against recombinant HRES-1/Rab4 detected a native protein of identical molecular weight in human T cells. HRES-1 nucleotides 2151-1606, located upstream of HRES-1/Rab4 exon1, have promoter activity when oriented in the direction of HRES-1/Rab4 transcription. The HIV-1 tat gene stimulates transcriptional activity of the HRES-1/Rab4 promoter via trans-activation of the HRES-1 LTR. Transfection of HIV-1 tat into HeLa or infection of H9 and Jurkat cells by HIV-1 increased HRES-1/Rab4 protein levels. Overexpression of HRES-1/Rab4 in Jurkat cells abrogated HIV infection, gag p24 production and apoptosis, while dominant-negative HRES-1/Rab4S27N had the opposite effects. HRES-1/Rab4 inhibited surface expression of CD4 and targeted it for lysosomal degradation. HRES-1/Rab4S27N enhanced surface expression, recycling, and total cellular CD4 content. Infection by HIV elicited a coordinate downregulation of CD4 and upregulation of HRES-1/Rab4 in PBL. Moreover, overexpression of HRES-1/Rab4 reduced CD4 expression on peripheral blood CD4+ T cells. Stimulation by HIV-1 of HRES-1/Rab4 expression and its regulation of CD4 recycling reveal novel coordinate interactions between an infectious retrovirus and the human genome.