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Human immunodeficiency virus type 1 (HIV-1) infection of the monocytic lineage is involved in the pathologic events associated with AIDS and HIV-1-associated dementia (HAD). Hematopoietic progenitor cells (HPCs) within the bone marrow are refractile to HIV-1 infection, while their progeny of the monocyte-macrophage lineage are susceptible. Previous studies, using phorbol-myristate-acetate (PMA) as a differentiating agent, have suggested that the CD34+/CD38+ TF-1 cell line may be used as one model to study the differentiation processes of HPCs. In the present study, medium that has been conditioned by PMA-treated TF-1 cells but is devoid of any traces of PMA, was utilized to induce differentiation of TF-1 cells. The conditioned medium (CM) from this bone marrow-derived cell population is enriched with respect to numerous cytokines and induces differentiation and activation of TF-1 cells, as indicated by changes in the expression of CD34, CD38, and CD69 cell surface molecules. Furthermore, treatment with CM was also shown to induce the expression of CCR5 and CXCR4, while maintaining the expression of CD4, which was ultimately correlated with increased susceptibility to HIV-1. Additionally, the activation of the TF-1 cells was shown to lead to increased LTR activity, with specificity protein (Sp) and nuclear factor kappa-light-chain-enhancer of activated B cells) NF-κB factors playing a crucial role in HIV-1 long terminal repeat (LTR)-mediated transcription and possibly overall TF-1 permissivity. Interleukin (IL)-1β, which is elevated in the CM, recapitulates some of the CM effects. In summary, these studies suggest that the TF-1 cell line could serve as a model to study the susceptibility of bone marrow progenitor cells to HIV-1 infection.