HIV-1 Nef is expressed in astrocytes, but a contribution to neuropathogenesis and the development of HIV-associated dementia (HAD) remains uncertain. To determine the neuropathogenic actions of the HIV-1 Nef protein, the brain-derived (YU-2) and blood-derived (NL4-3) Nef proteins were expressed in neural cells using an alphavirus vector, which resulted in astrocyte death (P < 0.001). Supernatants from Nef-expressing astrocytes also caused neuronal death, suggesting the release of neurotoxic molecules by astrocytes. Analysis of pro-inflammatory gene induction in astrocytes expressing Nef revealed increased IP-10 mRNA expression (4000-fold) that was Nef sequence dependent. Recombinant IP-10 caused selective cell death in neurons (P < 0.001) but not astrocytes, and the cytotoxicity of supernatant from astrocytes expressing Nef YU-2 was blocked by an antibody directed against the chemokine receptor CXCR3 (P < 0.001). SCID/NOD mice implanted with a Nef YU-2-expressing vector displayed abnormal motor behavior (P < 0.05), neuroinflammation, and neuronal loss relative to controls. Analysis of mRNA levels in brains from patients with HAD also revealed increased expression of IP-10 (P < 0.05), which was confirmed by immunoreactivity detected principally in astrocytes. Phylogenetic and protein structure analyses of Nef sequences derived from HIV/AIDS patients with and without HAD suggested viral evolution toward a neurotropic Nef protein. These results indicate that HIV-1 Nef contributes to neuropathogenesis by directly causing astrocyte death together with indirect neuronal death through the cytotoxic actions of IP-10 on neurons. Furthermore, Nef molecular diversity was evident in brain tissue among patients with neurological disease and which may influence IP-10 production by astrocytes.