It is well established that the two major glial cells in the central nervous system (CNS), astrocytes and microglia, are key participants in mediating the neurologic dysfunction associated with HIV infection of the CNS. In this study, we investigated the ability of the major envelope glycoprotein of HIV, glycoprotein 120 (gp120), to regulate intercellular adhesion molecule-1 (ICAM-1) expression in glial cells, because ICAM-1 is important in mediating immune responsiveness in the CNS, facilitating entry of HIV-infected cells into the CNS, and promoting syncytia formation. Our results indicate that gp120 enhances ICAM-1 gene expression in primary rat astrocytes, primary human astrocytes, a human astroglioma cell line CRT, and primary rat microglia. The signal transduction events involved in gp120-mediated enhancement of ICAM-1 appear to involve activation of both protein kinase C and tyrosine kinase, because inhibitors of protein kinase C and tyrosine kinase abrogate gp120-mediated ICAM-1 expression in both astrocytes and microglia. Moreover, gp120 induces tyrosine phosphorylation of signal transducer and activator of transcription (STAT-1α) as well as the Janus kinase (JAK2) in glial cells. We also demonstrate that gp120-mediated ICAM-1 expression has functional significance, as it enhances the ability of monocytic cells to bind to gp120-stimulated human astrocytes in an ICAM-1/β2 integrin-dependent fashion. These results provide new insights into how gp120 can influence the involvement of glial cells in the pathogenesis of AIDS dementia complex.