Mononuclear phagocytes including monocytes and macrophages, are important defense components of innate immunity, but can be detrimental in HIV-1 infection by serving as the principal reservoirs of virus in brain and triggering a strong immune response. These viral reservoirs represent a challenge to HIV-1 eradication since they continue producing virus in tissue despite antiretroviral therapy. HIV-1 associated neurocognitive disorders (HAND) involve alterations to the blood-brain barrier and migration of activated HIV-1 infected monocytes to the brain with subsequent induced immune activation response. Our group recently showed that HIV replication in monocyte-derived macrophages is associated with increased cystatin B. This cysteine protease inhibitor also inhibits the interferon-induced antiviral response by decreasing levels of tyrosine phosphorylated STAT-1. These recent discoveries reveal novel mechanisms of HIV persistence that could be targeted by new therapeutic approaches to eliminate HIV in macrophage reservoirs. However, cystatin B has been also associated with neuroprotection. Cystatin B is an inhibitor of the cysteine protease cathepsin B, a potent neurotoxin. During HIV-1 infection cystatin B and cathepsin B are upregulated in macrophages. Reduction in cystatin/cathepsin interactions in infected macrophages leads to increased cathepsin B secretion and activity which contributes to neuronal apoptosis. Increased intracellular expression of both proteins was recently found in monocytes from Hispanic women with HAND. These findings provide new evidence for the role of cathepsin /cystatin system in the neuropathogenesis induced by HIV-infected macrophages. We summarize recent research on cystatin B and one of its substrates, cathepsin B, in HIV replication in macrophages and neuropathogenesis.