HIV infection leads to severe immunosuppression and in a sub-population of patients, encephalitis. Whether systemic immunosuppression is required for CNS infection is still unclear. However, latent infection of monocytes/macrophages is an important mechanism by which HIV escapes immune surveillance and enters the CNS. Unlike other viral encephalitides, HIV predominantly infects macrophages/microglia and not neurons and glia. These cells produce retroviral proteins and cytokines which may be neurotoxic. Despite significant MHC expression within the CNS, there is a limited infiltration of immune cells, possibly due to a defect in systemic immunity. Anti-retroviral therapy by decreasing viral replication and reversing immunosuppression, may arrest nervous system damage.