The mechanism(s) by which retroviral proteins exert immunosuppressive influences has remained enigmatic. Here, Soichi Haraguchi, Robert Good and Noorbibi Day propose that induction of intracellular cAMP by a synthetic, immunosuppressive, retroviral envelope peptide causes a shift in the cytokine balance, leading to suppression of cell-mediated immunity by upregulation of interleukin 10 (IL-10) and downregulation of IL-2, IL-12 and tumor necrosis factor alpha production. This may be a crucial step towards generation of immune dysfunction.