The chemokine stromal cell-derived factor 1 (SDF-1) is the natural ligand for CXC chemokine receptor 4 (CXCR4). SDF-1 inhibits infection of CD4+ cells by X4 (CXCR4-dependent) human immunodeficiency virus (HIV) strains. We previously showed that SDF-1 alpha interacts specifically with heparin or heparan sulfates (HSs). Herein, we delimited the boundaries of the HS-binding domain located in the first beta-strand of SDF-1 alpha as the critical residues. We also provide evidence that binding to cell surface heparan sulfate proteoglycans (HSPGs) determines the capacity of SDF-1 alpha to prevent the fusogenic activity of HIV-1 X4 isolates in leukocytes. Indeed, SDF-1 alpha mutants lacking the capacity to interact with HSPGs showed a substantially reduced capacity to prevent cell-to-cell fusion mediated by X4 HIV envelope glycoproteins. Moreover, the enzymatic removal of cell surface HS diminishes the HIV-inhibitory capacity of the chemokine to the levels shown by the HS-binding-disabled mutant counterparts. The mechanisms underlying the optimal HIV-inhibitory activity of SDF-1 alpha when attached to HSPGs were investigated. Combining fluorescence resonance energy transfer and laser confocal microscopy, we demonstrate the concomitant binding of SDF-1 alpha to CXCR4 and HSPGs at the cell membrane. Using FRET between a Texas Red-labeled SDF-1 alpha and an enhanced green fluorescent protein-tagged CXCR4, we show that binding of SDF-1 alpha to cell surface HSPGs modifies neither the kinetics of occupancy nor activation in real time of CXCR4 by the chemokine. Moreover, attachment to HSPGs does not modify the potency of the chemokine to promote internalization of CXCR4. Attachment to cellular HSPGs may co-operate in the optimal anti-HIV activity of SDF-1 alpha by increasing the local concentration of the chemokine in the surrounding environment of CXCR4, thus facilitating sustained occupancy and down-regulation of the HIV coreceptor.