HIV-1-associated neurocognitive impairments are intrinsically linked to microglial immune activation, persistent viral infection, and inflammation. In the era of antiretroviral therapy, more subtle cognitive impairments occur without adaptive immune compromise. We posit that adaptive immunity is neuroprotective, serving in both the elimination of infected cells through CD8+ cytotoxic T cell activities and the regulation of neuroinflammatory responses of activated microglia. For the latter, little is known. Thus, we studied the neuromodulatory effects of CD4+ regulatory T cells (Treg; CD4+CD25+) or effector T cells in HIV-1-associated neurodegeneration. A newly developed HIV-1 encephalitis mouse model was used wherein murine bone marrow-derived macrophages are infected with a full-length HIV-1YU2/vesicular stomatitis viral pseudotype and injected into basal ganglia of syngeneic immunocompetent mice. Adoptive transfer of CD3-activated Treg attenuated astrogliosis and microglia inflammation with concomitant neuroprotection. Moreover, Treg-mediated anti-inflammatory activities and neuroprotection were associated with up-regulation of brain-derived neurotrophic factor and glial cell-derived neurotrophic factor expression and down-regulation of proinflammatory cytokines, oxidative stress, and viral replication. Effector T cells showed contrary effects. These results, taken together, demonstrate the importance of Treg in disease control and raise the possibility of their utility for therapeutic strategies.