Human endogenous retroviruses (HERVs) are differentially expressed depending on the cell type and physiological circumstances. HERV-K has been implicated in the pathogenesis of several diseases although the functional consequences of its expression remain unknown. Human immunodeficiency virus (HIV) infection causes neuroinflammation with neuronal damage and death. Herein, we investigated HERV-K(II)/(HML-2) envelope (Env) expression and its actions in the brain during HIV/AIDS. HERV-K(II) Env expression was assessed in healthy brain tissues, autopsied HIV HIV- infected (HIV+) and uninfected (HIV-) brains and in neural cell cultures by real time RT-PCR, massively parallel (deep) sequencing, immunoblotting and immunohistochemistry. Neuronal and neural stem cells expressing HERV-K(II) Env were analyzed in assays of host responses including cellular viability, immune responses and neurobehavioral outcomes. Deep sequencing of human brain transcriptomes disclosed that RNA sequences encoded by HERV-K were among the most abundant HERV sequences detected in human brain. Comparison of different cell types revealed that HERV-K(II) env RNA abundance was highest in cultured human neurons but was suppressed by epidermal growth factor exposure. HERV-K(II) Env immunoreactivity was increased in the cerebral cortex from persons with HIV/AIDS, principally localized in neurons. Human neuronal cells transfected with HERV-K(II) Env exhibited increased NGF and BDNF expression. Expression of HERV-K(II) Env in neuronal cells increased cellular viability and prevented neurotoxicity mediated by HIV-1 Vpr. Intracerebral delivery of HERV-K(II) Env expressed by neural stem cells suppressed TNF-α expression and microglial activation while also improving neurobehavioral deficits in vpr/RAG1-/- mice. HERV-K(II) Env was highly expressed in human neurons, especially during HIV/AIDS, but in addition exerted neuroprotective effects. These findings imply that HERV gene products might exert adaptive effects in circumstances of pathophysiological stress, perhaps underlying the conservation of HERVs within the human genome.