Vaccinia virus IHDA strain induces hemagglutinin (HA) on the surface membrane of infected cells and does not elicit cell-cell fusion (F-). We isolated 21 independent hemadsorption-negative (HAD-) mutant viruses from IHD-J and five HAD+ revertants from one of these mutants. Of the 21 mutants, 19 that synthesized either no or little HA at the cell surface caused cell-cell fusion (F+), whereas none of the five revertants that synthesized HA at the cell surface induced cell-cell fusion. Furthermore, anti-HA monoclonal antibody B2D10 induced extensive polykaryocytosis of IHD-J-infected cells and suppressed the ability of the IHD-J-infected cell extract to inhibit the polykaryocytosis induced by IHDW. The other 2 of the 21 HAD- mutants, B1 and A2, which induced HAs at the cell surface, showed F- and F+ phenotype, respectively. The HA molecule of mutant B1 had a single amino acid substitution of Lys for Glu-121 in its extracellular domain, whereas that of mutant A2 had a single substitution mutation of Tyr for Cys-103. We conclude that the vaccinia HA is a fusion inhibition protein, that the active sites for the two activities reside separately in its extracellular domain, and that cysteine-103 is important in forming the proper tertiary structure of the protein to exert both activities. © 1990.