HIV-1 infection impairs a number of macrophage effector functions, thereby contributing to development of opportunistic infections and the pathogenesis of AIDS. FcgammaR-mediated phagocytosis by human monocyte-derived macrophages (MDM) is inhibited by HIV-1 infection in vitro, and the underlying mechanism was investigated in this study. Inhibition of phagocytosis directly correlated with the multiplicity of HIV-1 infection. Expression of surface FcgammaRs was unaffected by HIV-1 infection, suggesting that inhibition of phagocytosis occurred during or after receptor binding. HIV-1 infection of MDM markedly inhibited tyrosine phosphorylation of the cellular proteins, which occurs following engagement of FcgammaRs, suggesting a defect downstream of initial receptor activation. FcgammaR-mediated phagocytosis in HIV-infected MDM was associated with inhibition of phosphorylation of tyrosine kinases from two different families, Hck and Syk, defective formation of Syk complexes with other tyrosine-phosphorylated proteins, and inhibition of paxillin activation. Down-modulation of protein expression but not mRNA of the gamma signaling subunit of FcgammaR (a docking site for Syk) was observed in HIV-infected MDM. Infection of MDM with a construct of HIV-1 in which nef was replaced with the gene for the gamma signaling subunit augmented FcgammaR-mediated phagocytosis, suggesting that down-modulation of gamma-chain protein expression in HIV-infected MDM caused the defective FcgammaR-mediated signaling and impairment of phagocytosis. This study is the first to demonstrate a specific alteration in phagocytosis signal transduction pathway, which provides a mechanism for the observed impaired FcgammaR-mediated phagocytosis in HIV-infected macrophages and contributes to the understanding of how HIV-1 impairs cell-mediated immunity leading to HIV-1 disease progression.