HIV-associated dementia (HAD) is a serious neurological disorder affecting about 7% of people with AIDS. In the brain, HIV-1 infects a restricted number of cell types, being primarily present in macrophages and microglial cells, less abundant in astrocytes, and rarely seen in oligodendrocytes and neurons. Lack of a productive HIV-1 infection of neuronal cells suggests the presence of an indirect pathway by which the virus may determine the brain pathology and neuronal dysfunction seen in AIDS patients. Among the participants in this event, viral proteins including gp120 and Tat, along with host factors including cytokines, chemokines, and several signaling pathways have received considerable attention. In this article, we discuss the most recent concepts pertaining to the mechanisms of HIV-1-induced neuronal dysfunction by highlighting the interplay between signal transduction pathways activated by viral and host factors and their consequences in neuronal cell function.