The binding of human immunodeficiency virus type 1 (HIV-1) gp120env to CD4 is the first event leading to infection and represents an important target for possible therapeutic intervention. To provide a tool for screening and quantitation of the effects of drugs inhibiting the Env-CD4 interaction, we developed a simple, fast and quantitative bioassay measuring the fusion between two cell lines generated by stable transfection: one expressing high levels of HIV-1 proteins but no infectious virus (HL2/3), and the other expressing the CD4 receptor and containing an inducible chloramphenicol acetyltransferase (CAT) gene linked to the HIV-1 long terminal repeat (HLCD4-CAT). Upon cocultivation of HL2/3 and HLCD4-CAT cells, efficient cell fusion is observed within 8 h. The efficiency of fusion can be evaluated visually and quantitated by measuring CAT enzyme. This novel bioassay allows testing for drugs capable of interfering with the CD4-Env interaction. HL2/3 cell line secretes gp120env in the medium and can be used for the production of Env protein.