A progressive encephalopathy occurs in 30 to 50% of infants and children infected with the human immunodeficiency virus (HIV). The expression of HIV antigen in the cerebrospinal fluid appears to correlate with the clinical occurrence of progressive encephalopathy. The signs of progressive encephalopathy in children with HIV infection, including loss of developmental milestones, impaired brain growth, and progressive motor dysfunction, indicate a poor prognosis and almost invariably a fatal outcome. Neuropathological findings in these children, including virus-laden macrophages and multinucleated giant cells are unique to this condition. Opportunistic or reactivated latent infections and neoplasms of brain occur in children with HIV infection but are uncommon. These findings support the hypothesis that the progressive encephalopathy observed in HIV-infected children is caused by primary infection of the brain with this virus. Epidemiological data predict increasing numbers of HIV-infected women and children. Research aimed at an understanding of the mechanism(s) of mother-to-infant transmission of HIV infection is urgently needed so that strategies for the prevention and treatment of such infection in children may be planned.