Macrophages and microglia are productively infected by HIV-1 and play a pivotal role in the pathogenesis of AIDS dementia. Although macrophages and microglia express CD45, a transmembrane protein tyrosine phosphatase, whether modulation of its activity affects human immunodeficiency virus type 1 (HIV-1) replication is unknown. Here, we report that of the five human CD45 isoforms, microglia express CD45RB and CD45RO (RB > RO) and treatment of microglia with a CD45 agonist antibody alphaCD45RO (UCHL-1) inhibits HIV-1 replication. alphaCD45RO prevented HIV-1 negative factor (Nef)-induced autophosphorylation of hematopoietic cell kinase (Hck), a myeloid lineage-specific Src kinase. Recombinant CD45 protein also inhibited HIV-1-induced Hck phosphorylation in microglia. Antennapedia-mediated delivery of Hck Src homology domain 3 (SH3), a domain that binds to the Nef PxxP motif with high affinity, reduced HIV-1-induced Hck phosphorylation and HIV-1 production in microglia. HIV-1-induced LTR transactivation was observed in U38 cells stably overexpressing wild-type Hck but not kinase-inactive Hck. In microglia, alphaCD45RO reduced activation of transcription factors (NF-kappaB and CCAAT enhancer binding protein) necessary for LTR transactivation in macrophages. These results establish that in myeloid lineage cells, Nef interacts with the Hck SH3 domain, resulting in autophosphorylation of Hck and an increase in HIV-1 transcription. alphaCD45RO-mediated inhibition of HIV-1 replication in microglia identifies the CD45 protein tyrosine phosphatase as a potential therapeutic target for HIV-1 infection/AIDS dementia.