HIV-associated neurocognitive disorders (HAND) affect 30% of infected patients despite suppressive antiretroviral therapy (ART) and are associated with chronic immune activation and oxidative stress within the systemic circulation and central nervous system (CNS). Pathological studies of post-mortem brain parenchyma indicate productive HIV replication in brain macrophages/microglia and restricted infection in some astrocytes, while analyses of cerebrospinal fluid (CSF) suggest infiltrating T lymphocytes as another CNS HIV cellular reservoir. In vitro studies have linked macrophage HIV infection and immune activation of macrophages and astrocytes with release of glutamate, reactive oxygen species, and pro-inflammatory cytokines, each of which is implicated in HAND neuropathogenesis. The increased immune activation and oxidative stress detected in blood and CSF of ART-treated individuals suggests that these processes could be targeted for neuroprotection. Accordingly, we previously identified a correlation between HAND and reduced protein expression of brain heme oxygenase-1 (HO-1), a highly inducible detoxifying enzyme with antioxidant and anti-inflammatory functions. We further demonstrated that HIV infection of macrophages reduces HO-1 RNA and protein and that this HO-1 loss is associated with neurotoxic levels of extracellular glutamate. We now demonstrate a second potential mechanism driving reduced expression of HO-1 protein in the brain that can be linked to immune activation and oxidative stress during HIV infection: proteasome-mediated HO-1 degradation in astrocytes chronically exposed to IFNγ, an HIV-associated CNS immune activator. We show that HO-1 protein loss in HIV-infected brain correlates with induction of IFNγ-inducible immunoproteasome subunits and is accompanied by increased HO-1 RNA; we also identified increased astrocyte immunoproteasome expression in these brains. In our in vitro models, prolonged exposure of human astrocytes, but not rodent astrocytes, to IFNγ post-transcriptionally reduced expression of HO-1 protein in a time and dose-dependent manner in association with induction of immunoproteasomes and loss of constitutive proteasomes. Furthermore, IFNγ reduced HO-1 protein half-life by two-fold, and this was blocked by proteasome inhibition. Our work thus suggests causal links between CNS immune activation, immunoproteasome induction, and enhanced HO-1 degradation that could contribute to neuropathogenesis not only in HAND but also other neurodegenerative disorders associated with increased IFNγ, chronic immune activation and oxidative stress.