The HIV-1 nef gene product, thought to interact with mediators of cell signalling, is overexpressed during the restricted HIV-1 infection of human astrocytes. This infection can be reactivated following exposure to tumour necrosis factor (TNF)-alpha. We examined the possibility that Nef alters the TNF-alpha-induced cell signalling in astroglioma cells through the sphingomyelin pathway. Sphingomyelinase activation by TNF-alpha was analysed in U251MG glial cells constitutively expressing Nef and compared with U251MG cells stably transfected with the expression vector alone. The consequent effect on the cellular proliferative response and induction of nuclear factor NF-kappa B and AP-1 binding activities were examined. A marked enhancement in the levels of ceramide, a product of the sphingomyelin hydrolysis, was observed in U251MG-Nef upon stimulation with TNF-alpha. In contrast, ceramide levels in control cells were barely increased under similar conditions. A concomitant reduction of sphingomyelin level occurred in U251MG-Nef cells. In addition, the reduced survival rate of U251MG cells resulting from TNF-alpha activation was prevented in the presence of Nef. Furthermore, electrophoretic mobility shift assays indicated that nef expression inhibits AP-1 activation without altering the induction of NF-kappa B. These results strongly suggest that nef expression in U251MG cells modulates the sphingomyelinase signalling pathway triggered by TNF-alpha, thus leading to important modifications in the activation and proliferation of glial cells. They also provide new insights to explain the widespread reactive astrogliosis observed in AIDS-associated neuropathological disorders.