Human immunodeficiency virus type 1 (HIV-1)-infected individuals may exhibit multiple hematopoietic abnormalities including anemia, granulocytopenia, thrombocytopenia, and myelodysplastic/hyperplastic alterations of the bone marrow, suggesting virus-induced abnormalities in the bone marrow microenvironment (7, 9, 11, 35). Evidence of alteration of fetal hematopoiesis including leukopenia, anemia, and thrombocytopenia has also been found in aborted fetuses from HIV-1-seropositive women (6, 32). These observations suggest that HIV-1 infection may affect processes important during early stages of hematopoiesis. However, several different factors, including direct intracellular effects of virus infection, interaction with viral proteins at the cell surface, perturbation of the cytokine network, or immune-mediated effects, may play a role. Following HIV-1 infection in vitro in long-term bone marrow cultures, inhibition of hematopoietic progenitor cell production occurs and alteration of production of cytokines relevant to hematopoiesis has been documented (14, 15, 27). These infected stromal cultures showed reduced production of the cytokines interleukin-6 (IL-6) and granulocyte colony-stimulating factor, which could affect regulatory signals important in hematopoiesis. Further in vitro studies suggested that HIV-1-induced suppression of hematopoiesis is mediated by the HIV-1-encoded envelope glycoprotein gp120 and the Nef regulatory protein, as well as by cellular proteins such as tumor necrosis factor alpha (8, 23). The p24 Gag protein of HIV-1 also was shown to inhibit myeloid colony formation of bone marrow cultures but had minor effects on erythroid colony formation (29). Purified CD34+ cells were reported to be susceptible to HIV-1 infection, as shown by the presence of proviral sequences in the ensuing colonies of erythroid and myeloid lineages generated from these cells (10). These effects could be influenced by the infection of microvascular endothelial cells of bone marrow stromal cultures from HIV-seropositive patients (27). Infection of these cells could affect the relevant neighboring microenvironment, by providing a continuing source of virus and by causing alteration of local cytokine levels. Therefore, HIV is likely to alter the stromal/progenitor cell microenvironment that supports hematopoiesis. However, these previous studies on in vitro consequences of virus infection could not determine how HIV-1 infection influences complex hematopoietic microenvironments in vivo. To investigate how HIV-1 might affect hematopoiesis in vivo, we used the SCID-hu (Thy/Liv) mouse model, in which human fetal thymus and liver tissue are coimplanted into severe combined immunodeficient mice, resulting in a functional human hematopoietic organ (Thy/Liv) (24, 28). This model allows maintenance and differentiation through thymopoiesis of human hematopoietic progenitor cells (28) and also recapitulates the effects of HIV-1 infection in the human thymus. Direct infection of various strains of HIV-1 into Thy/Liv implants results in severe depletion of CD4-bearing human thymocytes which mirrors that seen in infected individuals (2, 5, 17, 20, 21, 30). Morphologic alterations of the thymic stroma, possibly due to infection of thymic epithelial cells, have been seen (30). These effects are precipitated by a large proviral burden, which may be as high as nearly one copy of the viral genome per CD4+ cell (18). Both direct virus-induced killing (18) and indirect apoptotic effects (31) have been implicated in the observed depletion of CD4+ thymocytes. Furthermore, this model has been used to determine the viral accessory genes involved in pathogenesis (3, 16) and the response of HIV-1 to antiviral therapies (19, 25, 26, 33). Previously, McCune et al. (24) reported that human pluripotent hematopoietic progenitor cells capable of giving rise to myeloid and erythroid colonies ex vivo in response to cytokines are maintained for extended periods of time in this model. The SCID-hu system has thus proven relevant to the clinical situation, is amenable to manipulation and analyses, and offers an opportunity to investigate the effects of HIV-1 infection on multiple arms of hematopoiesis. Here we report that HIV-1 infection profoundly decreases the ability to recover hematopoietic colony-forming activity (CFA) from Thy/Liv implants. However, this effect is reversible following administration of combination antiretroviral therapy. Our studies thus establish a causal effect of viral replication on hematopoiesis of multiple lineages. In addition, the reversible nature of this inhibitory effect following therapy suggests that neither the very immature hematopoietic progenitor cell nor the differentiation-inducing microenvironment is destroyed by high levels of HIV-1. Furthermore, we identify a viral strain, isolated from a pediatric patient exhibiting severe hematologic abnormalities, which preferentially inhibits hematopoietic CFA rather than inducing CD4+ thymocyte depletion. Together our studies suggest that HIV-1 may be directly responsible for many of the hematopoietic perturbations seen in infected individuals.