We analysed clones of HeLa cells stably expressing the human immunodeficiency virus (HIV-1) envelope gene (env) and the HIV-1 receptor, CD4. Surprisingly, individual clones were found to consist of two distinct populations of cells differing by about 10-fold in the level of surface CD4. When high and low CD4-expressing cells were separated by FACS, each subpopulation gave rise to a mixture of high and low CD4-expressing cells after several days in culture. High and low CD4-expressing subpopulations did not differ with respect to the amount of intracellular Env, but there was an inverse correlation between CD4 and another HIV-1 protein encoded by the same segment of the HIV genome, Vpu. High surface CD4 cells had high levels of intracellular CD4, largely in the perinuclear region, and low levels of Vpu with a diffuse staining pattern. Conversely, low surface CD4 cells had low levels of intracellular CD4 with a diffuse staining pattern, and high levels of Vpu, largely in the perinuclear region. Vectors containing mutant versions of either Env or Vpu failed to down-regulate surface CD4. The phenomenon of bimodal expression of a surface protein in cells derived from single clones provides a simple model of differentiation in vitro. We show how a hypothetical interaction between CD4 and a multimer of Vpu, the multimerization of which is cooperative, would lead to bimodal expression of CD4. This model may be generalized and could explain other cellular 'switches'.