Cholesterol-rich plasma membrane microdomains are important for entry of many viruses, including retroviruses. Depletion of cholesterol with 2-hydroxypropyl-beta-cyclodextrin inhibits entry of human T cell leukemia virus type I (HTLV-1) and HTLV-I envelope pseudotyped lentivirus particles. Using a soluble fusion protein of the HTLV-I surface envelope protein with the immunoglobulin Fc domain, the HTLV-I receptor was found to colocalize with a raft-associated marker and to cluster in specific plasma membrane microdomains. Depletion of cholesterol did not alter receptor binding activity, suggesting a requirement for cholesterol in a postbinding virus entry step.