A region of human interleukin-2 (IL-2) which was predicted to be a contact point with its receptor was used to locate a homologous region in the envelope protein of human T-lymphotropic retrovirus (HTLV-III). This homologous six amino acid peptide from the carboxy (C)-terminus of the HTLV-III envelope protein was found to inhibit the biological activity of human IL-2 in a murine spleen cell proliferation assay. When conjugated to a carrier protein, this peptide inhibited the binding of radiolabelled IL-2 to its receptor. The biological activity of the peptide was antagonized by a six amino acid peptide fragment of the IL-2 receptor which was predicted to be the contact point on the receptor that corresponded to the binding region of IL-2. The HTLV-III peptide also inhibited the binding of radiolabelled IL-2 to polyclonal anti-IL-2 antiserum. These data support the previous assignment of contact points between IL-2 and its receptor. They also suggest two possible mechanisms of immunosuppression during acquired immunodeficiency syndrome (AIDS). One involves direct competition of the envelope protein or its fragments with IL-2 for binding to the IL-2 receptor. The other involves antibodies to the envelope protein which crossreact with and neutralize IL-2. © 1986 Academic Press, Inc.