Human immunodeficiency virus type 1 (HIV-1) infects the central nervous system (CNS) and plays a direct role in the pathogenesis of AIDS dementia. However, mechanisms underlying HIV-1 gene expression in the CNS are poorly understood. The importance of CCAAT/enhancer binding proteins (C/EBP) for HIV-1 expression in cells of the immune system has been recently reported. In this study, we have examined the role and the molecular mechanisms by which proteins of the C/EBP family regulate HIV-1 gene transcription in human brain cells. We found that NF-IL6 acts as a potent activator of the long terminal repeat (LTR)-driven transcription in microglial and oligodendroglioma cells. In contrast, C/EBP inhibits NF-IL6-induced activation. Consistent with previous data, our transient expression results show cell-type-specific NF-IL6-mediated transactivation. In glial cells, full activation needs the presence of the C/EBP binding sites; however, NF-IL6 is still able to function via the minimal 40/+80 region. In microglial cells, C/EBP sites are not essential, since NF-IL6 acts through the 68/+80 LTR region, containing two binding sites for the transcription factor Sp1. Moreover, we show that functional interactions between NF-IL6 and Sp1 lead to synergistic transcriptional activation of the LTR in oligodendroglioma and to mutual repression in microglial cells. We further demonstrate that NF-IL6 physically interacts with the nuclear receptor chicken ovalbumin upstream promoter transcription factor (COUP-TF), via its DNA binding domain, in vitro and in cells, which results in mutual transcriptional repression. These findings reveal how the interplay of NF-IL6 and C/EBP, together with Sp1 and COUP-TF, regulates HIV-1 gene transcription in brain cells.