Mononuclear phagocytic cells and CD4+ T lymphocytes represent the major targets for infection by HIV-1 in vivo. The most severe pathogenic features associated with HIV-1 infection can be attributed to malfunction or premature death of these cells that are of hematopoietic origin. Patients with acquired immunodeficiency syndrome (AIDS), suffer from many hematologic disorders, particularly those persons with long-term infection of HIV-1. These disorders include anemia, lymphocytopenia, thrombocytopenia and neutropenia. The mechanisms that lead to the induction of these disorders are multi-factorial. However, sufficient evidence has accumulated which suggests that HIV-1 infection of cells within the microenvironment of the bone marrow can lead to the induction of hematopoietic deficits. Most studies indicate that marrow-derived hematopoietic stem cells cannot be infected by HIV-1 until they undergo modest differentiation in order to express the appropriate receptors to enable virus entry and subsequent replication. Some cells within the mixed environment of the marrow stroma appear to support HIV-1 replication however. These cells include marrow microvascular endothelial cells, sometimes referred to as blanket cells, stromal fibroblasts, as well as mononuclear phagocytes. Our recent experiments suggest that the HIV-1 accessory protein, Vpr, plays some role in the activation of marrow-derived mononuclear phagocytes which appears to result in premature phagocytosis of non-adherent marrow cells present in the in vitro cultures. This phenomenon could account, in part, for the induction of cytopenias that are typical of individuals infected by HIV-1.