Nef is a 27-kDa myristoylated protein conserved in primate lentiviruses. In vivo, simian immunodeficiency virus Nef is required in macaques to produce a high viral load and full pathological effects. Nef has at least three major effects in vitro, induction of CD4 down-regulation, alteration of T cell activation pathways, and enhancement of viral infectivity. We have used the yeast two-hybrid system to identify cellular proteins that interact with HIV-1Lai Nef and could mediate Nef function. A human cDNA was isolated that encodes a new type of thioesterase, an enzyme that cleaves thioester bonds. This novel thioesterase is unlike the animal types I and II thioesterases previously cloned but is homologous to the Escherichia coli thioesterase II. Nef and this thioesterase interact in vitro and are co-immunoprecipitated by anti-Nef antibodies in CEM cells expressing Nef. Nef alleles from human immunodeficiency virus-1 (HIV-1) isolates unable to down-regulate CD4 do not react or react poorly with thioesterase. An HIV-1 NefLai mutant selected for its lack of interaction with thioesterase was also unable to down-regulate CD4 cell-surface expression. These observations suggest that this human thioesterase is a cellular mediator of Nef-induced CD4 down-regulation.