Encephalopathy and neurological disorders are a major manifestation of pediatric AIDS. Although HIV-1 can replicate in cells of neuronal and glial origin, it is yet unclear whether immature neural cells, which are present during nervous system development, can support HIV-1 replication and whether neurotrophic factors can modulate HIV-1 gene expression. In this study we show that a glial cell line with a phenotype closely resembling immature glial cells is more permissive to HIV-1 infection and replication than a neuroblastic cell line. After HIV-1 infection or after transfection of these cells with the HIV-1 LTR-CAT reporter gene alone or in the presence of Tat, both HIV-1 replication and viral gene expression progressively decrease in the neuronal cell line, while they increase in the glial cell line. In both cell types viral gene expression and replication are augmented by the addition to the cells of nerve growth factor (NGF) at concentrations which induce neuronal differentiation. However, these effects are again more evident with the glial cell type, suggesting that immature glial cells may represent one of the major targets and reservoirs of HIV-1 in the developing nervous system. As NGF and Tat act synergistically in inducing HIV-1 gene expression, these data also suggest that during development the presence of high levels of neural trophic factors may activate viral replication and render the CNS more susceptible to the deleterious effects of HIV-1 infection.