To investigate a possible protective role of HTLV-III neutralizing antibodies in individuals exposed to the virus, sera of children with acquired immunodeficiency syndrome or acquired immunodeficiency syndrome-related complex were analyzed for neutralizability of HTLV-IIIB infectivity. Twelve pediatric patients (nine acquired immunodeficiency syndrome, three acquired immunodeficiency syndrome-related complex) were clinically stable and had survived more than 2 yr postonset. Their predominant clinical problems included lymphocytic interstitial pneumonia, candidiasis, recurrent bacterial infections, failure to thrive, and lymphadenopathy. Twelve additional children (all acquired immunodeficiency syndrome) were classified as clinically poor; 10 of them had died. Their median length of survival was less than 2 yr, and their disease spectrum included progressive encephalopathy, thymic depletion or atrophy, and Pneumocystis carinii pneumonia in addition to many of the clinical features of the stable children. All (100%) of the stable patients possessed serum neutralizing antibody in contrast to only one of the 12 (8%) clinically poor patients. A simple decline in immunologic reactivity to HTLV-III antigens with disease progression did not account for this difference, since HTLV-III antibody titers of the clinically poor cases (1 X 10(2) to 1 X 10(7)) ranged as high as those of the stable cases (1 X 10(4) to 1 X 10(7)) when measured by the ELISA technique. Although stable cases possessed a higher geometric mean titer (2.8 X 10(5)) by ELISA than the poor cases (4 X 10(4)), this difference was not statistically significant. Serial serum samples from stable children exhibited continual neutralizing antibody activity while two of three clinically poor cases lacked neutralizing activity in serial specimens.(ABSTRACT TRUNCATED AT 250 WORDS)