The HIV-1 Nef protein plays a critical role in viral pathogenesis. Nef has been shown to modulate dendritic cell (DC) function, in particular perturbing their ability to present Ag. To further characterize the effects of Nef on DCs, we established a panel of transfectants of the murine DC line, DC2.4, stably expressing differing levels of either wild-type Nef, or a number of Nef mutants lacking key functional motifs. Transfectants expressing increasing levels of wild-type Nef demonstrated a dose-dependent shrinkage and loss of dendrites. Nef expression levels also correlated with increased proliferative ability but did not confer resistance to proapoptotic stimuli. Importantly, Nef expression resulted in an impairment of Ag presentation to T cells correlating with a reduction in the cell surface expression of molecules involved in Ag presentation such as MHC class I, CD80/86, and ICAM-1. Nef expression also rendered DC2.4 cells resistant to the maturation stimulus provided by an anti-CD40 Ab. Mutations in either the myristoylation site or Src homology 3-domain binding polyproline motif of Nef abolished these effects. Previous studies had shown that these mutations also abolished the ability of Nef to activate the p21-activated kinase, PAK2. Consistent with this, stable expression of constitutively active PAK2 in DC2.4 mimicked the effects of Nef. We conclude that Nef, acting via activation of PAK2, inhibits both DC maturation and Ag presentation. These data have clear implications for the role of Nef in early stages of HIV-1 infection and validate Nef as a valid target for development of antiviral chemotherapeutics.