Nef is incorporated into the mature virus (about 70 molecules per virion). Like Vpu, Nef  influences the expression of CD4 antigen by the HIV-infected cell but since Nef is expressed early in infection, its influence on CD4 expression is different. Nef contains a myristic acid residue at its N terminus. When a cell is infected by HIV, it is beneficial to the infecting virus that the cell does not become multiply infected and also that the cell is not recognized by cytotoxic T cells because gp120 is bound to the surface (via CD4 antigen). Nef causes the surface CD4 antigen (as opposed to newly synthesized ER-associated protein in the case of Vpu) to be internalized and degraded in lysosomes. This Nef-mediated down regulation depends on a dileucine motif in the C-terminal region of the CD4 molecule. It is supposed that nef acts a link between CD4 and the endocytosis pathway of the cell, that is it allows CD4 protein to interact with COP and adaptin proteins  that mediate the internalization of surface proteins into clathrin-coated pits. Down regulation of CD4 by Nef also allows escape of HIV from the cells (as is the case with Vpu).

The name Nef comes from its original designation as a negative regulatory factor since viruses that lack Nef have lower rates of RNA synthesis in the infected cell. It was suggested that Nef participates in virus assembly and maturation. Nef that is incorporated into the virus is cleaved by the virus-encoded protease. Nef binds to src family proteins via the SH3 domain and regulates their tyrosine kinase activity. This is important in the enhancement of viral infectivity but not for CD4 down regulation.

For further information see: Alan Frankel and John A. T. Young, HIV-1: Fifteen proteins and an RNA Annual Review of Biochemistry 67: 1-25, 1998