Patients with human immunodeficiency virus-1 (HIV-1) infection often present with bone marrow (BM) failure that may affect all hematopoietic lineages. It is presently unclear whether this failure reflects a direct viral impairment of the CD34+ hematopoietic progenitor cells or whether the virus affects the BM microenvironment. To study the effects of HIV-1 on the BM microenvironment, we examined the stromal cell monolayers in long-term BM culture (LTBMC), which are the in vitro equivalent of the hematopoietic microenvironment. We assessed the hematopoietic support function (HSF) of human stromal layers by determining the cellular proliferation and colony-forming ability of hematopoietic progenitors from BM cells grown on the stromal layers. We show that the HSF is reduced by in vitro infection of the human stromal cell layer by a monocytotropic isolate of HIV-1 (JR-FL). There is no loss of HSF when the stromal cell layer is resistant to HIV-1 replication, either using murine stromal cell layers that are innately resistant to HIV-1 infection or using human stromal cells genetically modified to express a gene that inhibits HIV-1 replication (an RRE decoy). Decreased HSF was seen using either human or murine hematopoietic cells, if the stromal cells were human cells that were susceptible to HIV-1 infection. These in vitro studies implicate HIV-1 replication in the stroma as the essential component causing decreased hematopoietic cell production in HIV-1 infection.