Serum vitamin D3-binding protein (Gc protein) is the precursor for the principal macrophage-activating factor (MAF). The precursor activity of serum Gc protein was lost or reduced in HIV-infected patients. These patient sera contained alpha-N-acetylgalactosaminidase (Nagalase), which deglycosylates serum Gc protein. Deglycosylated Gc protein cannot be converted to MAF and thus loses MAF precursor activity, leading to immunosuppression. Nagalase in the blood stream of HIV-infected patients was complexed with patient immunoglobulin G, suggesting that this enzyme is immunogenic, seemingly a viral gene product. In fact, Nagalase was inducible by treatment of cultures of HIV-infected patient peripheral blood mononuclear cells with a provirus-inducing agent. This enzyme was immunoprecipitable with polyclonal anti-HIV but not with anticellular constitutive enzyme or with antitumor Nagalase. The kinetic parameters (km value of 1.27 mM and pH optimum of 6.1), of the patient serum Nagalase were distinct from those of constitutive enzyme (km value of 4.83 mM and pH optimum of 4.3). This glycosidase should reside on an envelope protein capable of interacting with cellular membranous O-glycans. Although cloned gp160 exhibited no Nagalase activity, treatment of gp160 with trypsin expressed Nagalase activity, suggesting that proteolytic cleavage of gp160 to generate gp120 and gp41 is required for Nagalase activity. Cloned gp120 exhibited Nagalase activity while cloned gp41 showed no Nagalase activity. Since proteolytic cleavage of protein gp160 is required for expression of both fusion capacity and Nagalase activity, Nagalase seems to be an enzymatic basis for fusion in the infectious process. Therefore, Nagalase appears to play dual roles in viral infectivity and immunosuppression.