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To study the effects of HIV-1 Nef on CNS-derived cells in vivo, an expression system based on the murine neural stem cell line C17.2 was established. Stable expression of LAV-1(Bru)-nef in these cells induced a transformed phenotype and enhanced cell growth in soft agar. Further experiments using previously established nef-expressing human astrocytoma cell lines as well as nef-expressing murine fibroblasts suggested a brain cell-specific transforming activity of Nef. After implantation into syngeneic or nude mice both murine and human nef-expressing CNS-derived cells induced tumor development. Interestingly, human astrocytoma cells expressing a Nef mutant carrying a disrupted SH3-binding motif involved in protein-protein interactions failed to induce tumor formation. These in vivo data suggest that Nef promotes neoplastic transformation of immortalized murine neural stem cells and enhances malignancy of low-tumorigenic human astrocytoma cells. Nef may therefore be involved in the development of AIDS-associated brain tumors.