An increased incidence of bone and lipid toxicities is associated with HIV-1 infection and its treatment. Mesenchymal stem cells (MSCs) are multipotent cells that can differentiate into both osteoblasts (OB) and adipocytes (AC). We hypothesize that the interaction of MSC and HIV-1 underlie these toxicities. Serum was collected from uninfected control and HIV-infected, antiviral-naive patients. Sera were divided into three groups: HIV-negative sera (n = 5), HIV-positive low viral load (LVL) (VL range 120; 4000, n = 5) or high viral load (HVL) (VL range 100,000; 500,000, n = 5). MSCs were exposed to these sera (5%) in an adipogenic/osteogenic condition and in nondifferentiating conditions in acute and chronic exposure models. Markers of adipogenesis/osteogenesis were examined in both MSCs induced to differentiated and nondifferentiating cells. Sera from HVL HIV-1-infected individuals induced a clear proadipogenic phenotype, as evidenced by an increase in adipocyte formation and the induction of increased expression of adipogenic markers including LPL and PPARγ. Both CD4 receptor blockade and treatment with the antiretroviral AZT attenuated these proadipogenic effects, suggesting that an infection event may underlie the observed phenomena. Finally, inhibition of COUP TF-1 by HIV-1 TAT was identified as a potential molecular mechanism for these effects. These results suggest that HIV-1 directly interacts with and may infect MSCs resulting in alterations of their differentiation potential, findings that significantly enhance our understanding of HIV-1-associated bone and fat toxicities.