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Background: The potential role of the human immunodeficiency virus-1 (HIV-1) accessory protein Nef in the pathogenesis of neuroAIDS is still poorly understood. Nef is a molecular adapter that influences several cellular signal transduction events and membrane trafficking. In human macrophages, Nef expression induces the production of extracellular factors (e.g. pro-inflammatory chemokines and cytokines) and the recruitment of T cells, thus favoring their infection and its own transfer to uninfected cells via exosomes, cellular protrusions or cell-to-cell contacts. Murine cells are normally not permissive for HIV-1 but, in transgenic mice, Nef is a major disease determinant. Both in human and murine macrophages, myristoylated Nef (myr+Nef) treatment has been shown to activate NF-κB, MAP kinases and interferon responsive factor 3 (IRF-3), thereby inducing tyrosine phosphorylation of signal transducers and activator of transcription (STAT)-1, STAT-2 and STAT-3 through the production of proinflammatory factors. Methodology/Principal Findings: We report that treatment of BV-2 murine microglial cells with myr+Nef leads to STAT-1, -2 and -3 tyrosine phosphorylation and upregulates the expression of inducible nitric oxide synthase (iNOS) with production of nitric oxide. We provide evidence that extracellular Nef regulates iNOS expression through NF-κB activation and, at least in part, interferon-β (IFNβ) release that acts in concert with Nef. All of these effects require both myristoylation and a highly conserved acidic cluster in the viral protein. Finally, we report that Nef induces the release of neurotoxic factors in the supernatants of microglial cells. Conclusions: These results suggest a potential role of extracellular Nef in promoting neuronal injury in the murine model. They also indicate a possible interplay between Nef and host factors in the pathogenesis of neuroAIDS through the production of reactive nitrogen species in microglial cells. [ABSTRACT FROM AUTHOR]