The high rate of HIV-1 mutation and the frequent sexual transmission highlight the need for novel therapeutic modalities with broad activity against both CXCR4 (X4) and CCR5 (R5)-tropic viruses. We investigated a large number of natural products, and from Sargassum fusiforme we isolated and identified palmitic acid (PA) as a natural small bioactive molecule with activity against HIV-1 infection. Treatment with 100μM PA inhibited both X4 and R5 independent infection in the T cell line up to 70%. Treatment with 22μM PA inhibited X4 infection in primary peripheral blood lymphocytes (PBL) up to 95% and 100μM PA inhibited R5 infection in primary macrophages by over 90%. Inhibition of infection was concentration dependent, and cell viability for all treatments tested remained above 80%, similar to treatment with 10−6M nucleoside analogue 2′, 3′-dideoxycytidine (ddC). Micromolar PA concentrations also inhibited cell-to-cell fusion and specific virus-to-cell fusion up to 62%. PA treatment did not result in internalization of the cell surface CD4 receptor or lipid raft disruption, and it did not inhibit intracellular virus replication. PA directly inhibited gp120-CD4 complex formation in a dose-dependent manner. We used fluorescence spectroscopy to determine that PA binds to the CD4 receptor with Kd ~1.5±0.2μM, and we used one-dimensional saturation transfer difference NMR (STD-NMR) to determined that the PA binding epitope for CD4 consists of the hydrophobic methyl and methelene groups located away from the PA carboxyl terminal, which blocks efficient gp120-CD4 attachment. These findings introduce a novel class of antiviral compound that binds directly to the CD4 receptor, blocking HIV-1 entry and infection. Understanding the structure–affinity relationship (SAR) between PA and CD4 should lead to the development of PA analogs with greater potency against HIV-1 entry.