Human antibody 10E8 targets the conserved membrane proximal external region (MPER) of envelope glycoprotein (Env) subunit gp41 and neutralizes HIV-1 with exceptional potency. Remarkably, HIV-1 containing mutations that reportedly knockout 10E8 binding to linear MPER peptides are partially neutralized by 10E8, producing a local plateau in the dose response curve. Here, we found that virus partially neutralized by 10E8 becomes significantly less neutralization sensitive to various MPER antibodies and to soluble CD4 while becoming significantly more sensitive to antibodies and fusion inhibitors against the heptad repeats of gp41. Thus, 10E8 modulates sensitivity of Env to ligands both pre- and post-receptor engagement without complete neutralization. Partial neutralization by 10E8 was influenced at least in part by perturbing Env glycosylation. With unliganded Env, 10E8 bound with lower apparent affinity and lower subunit occupancy to MPER mutant compared to wild type trimers. However, 10E8 decreased functional stability of wild type Env while it had an opposite, stabilizing effect on MPER mutant Envs. Clade C isolates with natural MPER polymorphisms also showed partial neutralization by 10E8 with altered sensitivity to various gp41-targeted ligands. Our findings suggest a novel mechanism of virus neutralization by demonstrating how antibody binding to the base of a trimeric spike cross talks with adjacent subunits to modulate Env structure and function. The ability of an antibody to stabilize, destabilize, partially neutralize as well as alter neutralization sensitivity of a virion spike pre- and post-receptor engagement may have implications for immunotherapy and vaccine design.