Inflammatory cytokines and enzymes such as IL-1 and inducible nitric oxide synthase (iNOS) may play an important role in the pathogenesis of AIDS dementia, a condition associated with infection of the CNS cells by the HIV-1. In this report, we investigated the expression of iNOS, IL-1, and caspase-1 (interleukin-1 converting enzyme) in HIV-1 encephalitis (HIVE) by immunocytochemistry and analyzed their expression with respect to HIV-1 infection and glial activation. In HIVE, all three molecules were expressed at high levels in areas of HIV-1 infection (microglial nodules with HIV-1 p24 immunoreactivity) and in areas of diffuse white matter gliosis. Expression was cell-type specific, with IL-1 and caspase-1 being expressed in macrophages and microglia, and iNOS in activated astrocytes. Multinucleated giant cells, a hallmark of virally infected cells, showed intense staining for both IL-1 and caspase-1, suggesting induction of these molecules by HIV-1. Double immunocytochemistry demonstrated a regional co-localization of astrocyte iNOS and microglial IL-1 and caspase-1. These results support the notion that autocrine and paracrine interactions between HIV-1 infected macrophages and microglia, activated microglia, and astrocytes lead to expression of proinflammatory and neurotoxic molecules. iNOS and caspase-1 may provide additional therapeutic targets for HIVE.