This study explores the relationship of immune dysfunction to the neuropsychological performance of i.v. drug users (IVDUs) infected with HIV-1. Ninety-seven HIV-positive and 45 HIV-negative former IVDUs on methadone maintenance were evaluated using neuropsychological measures, physical examinations, and measures of immune function, including absolute CD4 counts and β2microglobulin (β2-M). There were no significant differences between the HIV-positive and HIV-negative subjects on any single neuropsychological domain. There was, however, a significant group difference on a composite indicator of neuropsychological impairment, with 32% of HIV-positive subjects demonstrating some degree of overall impairment compared with only 13% of HIV-negative subjects. HIV-positive subjects were then stratified according to the Centers for Disease Control (CDC) symptom groupings: group II, asymptomatic, n = 29; group III, lymphanenopathy, n = 30; and group IV A or C-2, symptomatic, non-AIDS, n = 38. There were no significant neuropsychological differences among the three CDC groups. The HIV-positive subjects were also stratified on absolute CD4 counts (<200, 201–400, and >400) and β2-M (>5, 3–5, and 3). Individuals with greater immune compromise (CD4, <200, β2-M, >5) were more impaired on measures of motor functioning. β2-M was found to be a better predictor than CD4 count of impaired neuropsychological performance. Furthermore, individuals with β2-M values >5 have more than a threefold increase in the incidence of neuropsychological impairment than those with β2-M values 3.0. These results suggest that β2-M may serve as a useful clinical marker for the development of neuropsychological impairment and that the risk of such impairment increases as the immune system weakens.