Cellular heat shock proteins (Hsps) are induced upon heat shock, UV irradiation and microbial or viral infection. They are also known to be involved in apoptosis and immune response in addition to their chaperone function. Although some literature exists regarding the role of Hsps in human immunodeficiency virus (HIV)-1 infection, a clear understanding of their role remains elusive. Previously, we have shown that Hsp40, a co-chaperone of Hsp70, interacts with HIV-1 negative regulatory factor (Nef) and is required for Nef-mediated increase in viral gene expression and replication. We now show that Hsp70 is also present in the Nef-Hsp40 complex reported earlier. Furthermore, Hsp70 inhibits viral gene expression and replication; however, Hsp40 can rescue this down regulation of viral gene expression induced by Hsp70. We also show that HIV-1 viral protein R is required for this inhibitory effect of Hsp70 on viral replication. Our data further show that Hsp40 is consistently up regulated in HIV-1 infection, whereas Hsp70 is down regulated after initial up regulation favoring viral replication. Finally, Hsp70 expression inhibits the phosphorylation of cyclin-dependent kinase 9 required for high-affinity binding of HIV-1 transactivator of transcription-positive transcription elongation factor b complex to transactivation response RNA, whereas Hsp40 seems to induce it. Thus, Hsp40 and Hsp70, both closely associated in their chaperone function, seem to act contrary to each other in regulating viral gene expression. It seems that Hsp70 favors the host by inhibiting viral replication, whereas Hsp40 works in favor of the virus by inducing its replication. Thus, differential expression of Hsp40 and Hsp70 reciprocally regulates viral gene expression and replication in HIV-1 infection.