BACKGROUND: The HIV Nef protein downregulates CD4 through sequential connection with clathrin-coated pits and the COP1 coatomer, resulting in accelerated endocytosis and lysosomal targeting. RESULTS: Here we report that the small GTPase ARF1 controls the Nef-induced, COP-mediated late-endosomal targeting of CD4. We find that Nef binds ARF1 directly and can recruit the GTPase onto endosomal membranes. Furthermore, a complex comprising Nef, ARF1, and betaCOP can be immunoprecipitated from cells expressing the viral protein. Residues in a C-terminal loop of the viral protein facilitate both these interactions and the targeting of Nef and CD4 to acidic late endosomes, whereas other residues primarily involved in mediating CD4 endocytosis are dispensable for this process. Finally, a dominant-negative ARF1 mutant blocks the migration of the Nef-CD4 complex to lysosomes. CONCLUSIONS: Our results support a model in which ARF1 is the immediate downstream partner of Nef for CD4 lysosomal targeting.