Proteolytic cleavage of constitutively expressed proteins can generate peptides with novel bioactive properties. Matrix metalloproteinase (MMP)-2 cleaves the 4 amino-terminal residues of the chemokine, stromal cell-derived factor (SDF)-1α, yielding a highly neurotoxic molecule, SDF(5-67), which fails to bind to its cognate receptor, CXCR4. Herein, we detected SDF(5-67) in brain monocytoid cells of HIV-infected persons, particularly in those with HIV-associated dementia. SDF(5-67) activated cell type-specific expression of proinflammatory genes including IL-1β, TNFα, indoleamine 2′,3′-dioxygenase (IDO), and IL-10 in both astrocytic and monocytoid cells (P < 0.05). Unlike SDF-1α, SDF(5-67) caused neuronal membrane perturbations with ensuing neurotoxicity and apoptosis (P < 0.05) through engagement of an inducible receptor. CXCR3 antagonists and siRNA-mediated knockdown of CXCR3 inhibited SDF(5-67)-stimulated neurophysiological changes, neuronal death, and neuroimmune activation (P < 0.05). Moreover SDF(5-67) bound directly to CXCR3 in a competitive manner, mediated by its amino terminus. In vivo neuroinflammation, neuronal loss, and neurobehavioral abnormalities caused by SDF(5-67) (P < 0.05) were prevented by a CXCR3 antagonist. These studies reveal additive neuropathogenic properties exerted by a proteolytically cleaved chemokine as consequences of a change in receptor specificity, culminating in neurodegeneration.