Cytolytic activity of human mononuclear peripheral blood leukocytes from healthy donors, cultured in interleukin-2 conditioned medium, was abrogated by in vitro infection with the lymphadenopathy associated virus (LAV) isolate of the human immunodeficiency virus (HIV). Although viral antigens are not expressed in cultured cells until 14 days postinfection, cytolytic activity was lost as early as 3 days after infection. Loss of cytolytic function was not a result of the release of suppressive factors from either infected cells or uninfected CEM cells since supernatants from neither infected cultures nor CEM cell cultures had any inhibitory effects on the function of uninfected cells. Cultured lymphocytes expressing Leu 11b were also shown to express HIV antigens via immunofluorescence after 14 days in culture. These results suggest that natural killer (NK) cells, as defined by expression of Leu 11b, were infected by HIV in vitro and the loss of lytic function was likely a direct consequence of that infection.