The release of neurotoxins by activated brain macrophages or microglia is one mechanism proposed to contribute to the development of neurological disease following infection by lentiviruses, including feline immunodeficiency virus (FIV). Since molecular diversity in the lentiviral envelope gene influences the expression of host molecules implicated in neuronal injury, the role of the envelope sequence in FIV neuropathogenesis was investigated by using the neurovirulent FIV strain V1CSF, the nonneurovirulent strain Petaluma, and a chimera (FIVCh) containing the V1CSF envelope gene in a Petaluma background. All three viruses replicated in primary feline macrophages with equal efficiency, but conditioned medium from V1CSF- or FIVCh-infected cells was significantly more neurotoxic than medium from Petaluma-infected cultures (P < 0.001) and could be attenuated in a dose-dependent manner by treatment with either the matrix metalloproteinase (MMP) inhibitor prinomastat (PMT) or function-blocking antibodies to MMP-2. Although FIV sequences were detectable by PCR in brain tissue from neonatal cats infected with each of the viral strains, immunohistochemistry revealed increased astrogliosis and macrophage activation in the brains of V1CSF- and FIVCh-infected cats relative to the other groups, together with elevated markers of neuronal stress that included morphological changes and increased c-fos immunoreactivity. Similarly, MMP-2, but not MMP-9, mRNA and protein expression was increased in brain tissues of V1CSF- and FIVCh-infected cats relative to Petaluma-infected animals (P < 0.01). Infection with V1CSF or FIVCh was also associated with greater CD4+ cell depletion (P < 0.001) and neurodevelopmental delays (P < 0.005), than in Petaluma-infected animals; these deficits improved following PMT therapy. These findings indicated that diversity in the envelope gene sequence influenced the neurovirulence exhibited by FIV both in vitro and in vivo, possibly through a mechanism involving the differential induction of MMP-2.