The Ulysses spacecraft has observed interplanetary coronal mass ejections in pure high-speed solar wind, in the shear layer between high-speed and low-speed, and, in conjunction with other satellites, the same coronal mass ejection (CME) has been seen in both high- and low-speed wind. If CMEs originate in the equatorial streamer belt, they must be able to somehow penetrate into high-speed solar wind flows. This paper presents numerical simulations of the interaction of the subset of CMEs known as magnetic clouds (i.e., a flux rope geometry) with a velocity shear layer. A spherical, two-speed solar wind model represents the stream interface. It is shown that provided the CME has a large enough poleward velocity at the Sun, it can readily penetrate the stream interface and enter the high-speed wind. It is also shown that under some initial conditions, internal magnetic reconnection can take place within the flux rope. As the flux rope field lines are sheared, oppositely directed fields are generated, which press together and reconnect. ¿ 2001 American Geophysical Union