Rosette inhibitory factor, RIF, previously described in serum from patients with hepatitis B virus infection, has been isolated and identified as a minor species of beta-lipoprotein of the low-density (LDL) class. It is unrelated to hepatitis B virus proteins or particles. Although discrete by reference to charge and density (1.050 +/- 0.004 g/cm3), RIF appears to be a complex macromolecular structure containing apolipoproteins A, B, and C. Greater than 400% recovery is achieved upon 300,000-fold purification from RIF+ sera suggesting activation of a precursor form that is not present in normal serum. RIF inhibits E rosette function of T lymphocytes in vitro with a lag period of approximately 4 h and maximal effect at 24 h consistent with a metabolically-induced event. RIF is functionally active at concentrations of 1 X 10(-12) M or greater, rapidly binds to lymphocytes, and has a functionally effective half-life of approximately 1.5 h. Approximately 2,900 receptors for RIF appear to be present per cell and a high mutual affinity is apparent (k approximately to 9 X 10(10) liters/mol). RIF has no detectable effect on mitogen (PHA) responsiveness of lymphocytes, but inhibits the capacity of lymphocytes to respond to histoincompatible cells in vitro at concentrations greater than 10(-8) M. Equivalent RIF- lipoprotein fractions from normal serum are equally inhibitory in the mixed lymphocyte reaction suggesting that this effect is not directly attributable to RIF activity. These data indicate that RIF is a unique and functionally specific species of LDL that represents either an association complex of lipoproteins or a hybrid molecule of unusual composition. The association of this factor with viral-induced hepatocellular injury underscores the need to elucidate its structure and function in greater detail.