Injection of human immunodeficiency virus type 1 (HIV-1)-infected human monocyte-derived macrophages (MDMs) into the basal ganglia of severe combined immunodeficient mice recapitulates histopathologic features of HIV-1 encephalitis (HIVE). Here, we show that the neural damage in HIVE mice extends beyond the basal ganglia and is associated with cognitive impairment. Morris water maze tests showed impaired spatial learning 8 d after MDM injection. Moreover, impaired synaptic potentiation in the hippocampal CA1 subregion was demonstrated at 8 and 15 d. By day 15, post-tetanic, short-term, and long-term potentiation were reduced by 14.1, 29.5, and 45.3% in HIVE mice compared with sham-injected or control animals. Neurofilament (NF) and synaptophysin (SP) antigens were decreased significantly in the CA2 hippocampal subregion of HIVE mice with limited neuronal apoptosis. By day 15, the CA2 region of HIVE mice expressed 3.8- and 2.6-fold less NF and SP than shams. These findings support the notion that HIV-1-infected and immune-competent brain macrophages can cause neuronal damage at distant anatomic sites. Importantly, the findings demonstrate the value of the model in exploring the physiological basis and therapeutic potential for HIV-1-associated dementia.