Human T-lymphotropic virus type III (LAV, HTLV-III) is aetiologically linked to acquired immune deficiency syndrome (AIDS) and persistent general lymphadenopathy (PGL). Specific radioimmunoassays (RIA), enzyme-linked assays, immunofluorescence assays (IFA) and immunoblotting techniques are being used widely to detect serum antibodies to HTLV-III in infected patients and in those at risk of infection. However, these assays do not functionally identify those antibodies that neutralize the infectivity of the virus. We have used three methods of titrating serum neutralizing factors: inhibition of syncytium induction, neutralization of envelope pseudotypes of vesicular stomatitis virus (VSV) and reduction of infectivity of HTLV-III for a cell line permissive to virus replication. We report here that sera from subjects in various disease categories possess only low-level neutralizing activity, even when antibodies to viral membrane antigens are present in high titre. Envelope pseudotypes prepared from four HTLV-III isolates made in three different countries are equally sensitive to neutralization by positive sera, including sera from patients yielding two of the virus isolates.