What does Hebrews 7:4 mean?

This verse reiterates the main point of verses 1 through 10. Abraham recognized that Melchizedek was greater, as shown by Abraham's giving Melchizedek a tithe. As great as Abraham was, and as uniquely positioned as he was by God, he knew that this king-priest (Genesis 14:18) was someone he was obligated to submissively honor. This begins a somewhat complex point made over the next few verses.

Since the Levitical priesthood was made up of limited, mortal men, it is also limited and imperfect in its ability. A priesthood of limited people is inferior to an unending priesthood of perfection: this is what Abraham's encounter with Melchizedek symbolizes here. Later, the author will point out how, in a manner of speaking, Levi and all of the Old Testament priests paid a tithe to Melchizedek, as they were "still in the loins" of Abraham, at the time (Hebrews 7:10). Melchizedek not only predated the Aaronic priesthood, he was not part of that lineage. And yet, Abraham honored him.