Background The human immunodeficiency virus-1 (HIV-1) envelope glycoprotein gp120 has been implicated in the development of AIDS-associated retinopathy. The present study tested the hypothesis that gp120 may induce oxidative stress including up regulation of inducible nitric oxide synthase (iNOS) and production of malondialdehyde (MDA) and nitric oxide (NO) to mediate retinopathy in retinal pigment epithelial (RPE) cells. Methods Human RPE cell line D407 was cultured and treated with gp120. HIV-1 gp120 protein induced lipid peroxidation product MDA. NO production and iNOS expression were examined in vitro by spectrophomtometry, real-time PCR, Western blotting, and confocal microscope. Results Addition of gp120 was able to induce RPE cells to produce NO and MDA in time- and dose-dependent manners (P＜0.05). Similarly, gp120 was also capable of up-regulating iNOS mRNA and protein in D407 cells in time- and dose-dependent manners. Conclusions Gp120 induces oxidative stress in D407 cell by stimulating MDA and NO production, which is mediated by up-regulating iNOS expression. Gp120 may mediate oxidation stress in AIDS-associated retinopathy.