Human T-cell lymphotropic virus type III (HTLV-III) has been isolated from neural tissues and cerebrospinal fluid (CSF) of patients with neurological syndromes associated with the acquired immune deficiency syndrome (AIDS) and the virus may be directly involved in the pathogenesis of the syndromes. To detect HTLV-III antigen in neural tissues from patients with AIDS, immunoperoxidase studies using a goat anti-HTLV-III serum were performed on frozen tissue sections of brain, spinal cord, and nerve from 13 patients with AIDS or HTLV-III-related neurological syndromes. HTLV-III was cultured from neural tissues or CSF in 11 of 13 of these patients. HTLV-III antigen was detected in the brains of 5 patients with AIDS and in none of the 13 non-AIDS control subjects. Rare positively stained cells were seen, frequently associated with capillaries and often located near microglial nodules. Morphologically, the cells resembled monocyte/macrophages and were found most frequently in the cortex of the frontal, temporal, and parietal lobes. These results provide further evidence that the subacute encephalitis of AIDS is associated with central nervous system infection by HTLV-III and that monocyte/macrophages are among the infected cell populations.