The release of potentially neurotoxic molecules by HIV-infected brain macrophages is accompanied by neuronal injury and death that results in the development of HIV-associated dementia (HAD). Among the potential neurotoxins implicated in the development of HAD is the HIV-1 transactivating protein, Tat. To investigate the mechanism by which Tat causes neurotoxicity, brain-derived Tat sequences from nondemented (Tat-ND) and demented (Tat-HAD) AIDS patients, which differed primarily in the augmenting region of Tat, were expressed in U937 monoblastoid cells and primary human macrophages. Cells expressing Tat-HAD protein exhibited elevated matrix metalloproteinase (MMP)-2 and -7 release and activation, but cells expressing Tat-ND did not exhibit enhanced MMP expression. Conditioned media from Tat-HAD-transfected cells caused significantly greater neuronal death (15.4 +/- 4.3%) than did Tat-ND (4.4 +/- 2.1%) or nontransfected (2.1 +/- 0.8%) cell-derived conditioned media. The neurotoxicity induced by Tat-HAD was inhibited by anti-MMP-2 or -7 antibodies (p < 0.005) but not by antibodies against MMP-9 or Tat. Similarly, scid/nod mice receiving striatal implants of Tat-HAD-transfected cells exhibited greater neurobehavioral abnormalities and neuronal loss (p < 0.005) than did animals receiving Tat-ND or nontransfected cells, which were reduced by treatment with the MMP inhibitor prinomastat (p < 0.005). These findings indicate that Tat causes neuronal death through an indirect mechanism that is Tat sequence dependent and involves the induction of MMPs.