Astrocyte elevated gene-1 (AEG-1), a novel human immunodeficiency virus (HIV)-1 and tumor necrosis factor (TNF)-α-inducible oncogene, has generated significant interest in the field of cancer research as a therapeutic target for many metastatic aggressive tumors. However, little is known about its role in astrocyte responses during HIV-1 central nervous system (CNS) infection and whether it contributes toward the development of HIV-associated neurocognitive disorders (HAND). Therefore, in this study, we investigated changes in AEG-1 CNS expression in HIV-1-infected brain tissues and elucidated a potential mechanism of AEG-1-mediated regulation of HAND. Immunoblotting and immunohistochemical analyses of HIV-1 seropositive and HIV-1 encephalitic human brain tissues revealed significantly elevated levels of AEG-1 protein. Immunohistochemical analyses of HIV-1 Tat transgenic mouse brain tissues also showed a marked increase in AEG-1 staining. Similar to in vivo observations, cultured astrocytes expressing HIV-1 Tat also revealed AEG-1 and cytokine up-regulation. Astrocytes treated with HAND-relevant stimuli, TNF-α, interleukin (IL)-1β, and HIV-1, also significantly induced AEG-1 expression and nuclear translocation via activation of the nuclear factor (NF)-κB pathway. Co-immunoprecipitation studies demonstrated IL-1β- or TNF-α-induced AEG-1 interaction with NF-κB p65 subunit. AEG-1 knockdown decreased NF-κB activation, nuclear translocation, and transcriptional output in TNF-α-treated astrocytes. Moreover, IL-1β treatment of AEG-1-overexpressing astrocytes significantly lowered expression of excitatory amino acid transporter 2, increased expression of excitatory amino acid transporter 2 repressor ying yang 1, and reduced glutamate clearance, a major transducer of excitotoxic neuronal damage. Findings from this study identify a novel transcriptional co-factor function of AEG-1 and further implicate AEG-1 in HAND-associated neuroinflammation. Background: Role of AEG-1, an HIV-1 neuropathology-associated gene, in astrocytes is unclear. Results: AEG-1 regulates astrocyte NF-κB activation and nuclear translocation, increases YY1 expression, and decreases EAAT2 expression and glutamate clearance. Conclusion: Elevated levels of astrocyte AEG-1 promote neuroinflammation by impairing glutamate clearance and up-regulating NF-κB signal transduction. Significance: Targeting AEG-1 may be an effective therapy for HIV-1-associated neuroinflammation.