HIV-1-associated dementia (HIV-D) remains a significant consequence of HIV-1 infection and AIDS. Since the clinical introduction of highly active antiretroviral therapy (HAART), the incidence of HIV-D has decreased, yet the prevalence has increased as patients are living longer under treatment. Additionally, a less severe form of HIV-D, minor cognitive motor disorder, has become an increasing issue. Two different models have been proposed for virus entry in the central nervous system (CNS) in HIV-D. In the ‘Trojan horse’ model, the virus enters the CNS early carried by macrophages and infects resident glia; later in the course of infection, virus replication is activated and additional monocyte/macrophages are recruited into the CNS via cytokine/chemokine networks and endothelial-cell–leukocyte interactions at the blood–brain barrier. In the ‘late invasion’ model, an inherently invasive activated monocyte subset is expanded from bone marrow as a result of immune dysregulation in the periphery in the setting of AIDS. In this review we discuss these two separate, although not mutually exclusive, means for virus entry and persistence in the CNS. Additionally, we explore mechanisms for neuronal injury and apoptosis, including the role of virus, viral and host proteins, oxidative stress and products of infected or uninfected activated microglia and astrocytes. Potential therapeutic strategies are also briefly discussed.