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CD163, a haptoglobin-hemoglobin (Hp-Hb) scavenger receptor, expressed by monocytes and macrophages, is important in resolution of inflammation. Age-related non-AIDS co-morbidities in HIV-infected individuals, particularly dementia and cardiovascular disease, result in part from effects of HIV-1 infection on monocyte and macrophage biology. CD163 co-expression on CD14+CD16++ monocytes has been proposed as a useful biomarker for HIV-1 disease progression and the presence of HIV associated dementia. Here we investigated CD163 expression on monocyte subsets ex vivo, on cultured macrophages, and soluble in plasma, in the setting of HIV-1 infection. Whole blood immunophenotyping revealed CD163 expression on CD14++CD16- monocytes but not on CD14+CD16++ monocytes (P = 0.004), supported by CD163 mRNA levels. Incubation with M-CSF induced CD163 protein expression on CD14+CD16++ monocytes to the same extent as CD14++CD16- monocytes. CD163 expression on CD14++CD16+ monocytes from HIV-infected subjects was significantly higher than from uninfected individuals, with a trend towards increased expression on CD14++CD16- monocytes (P = 0.019 and 0.069 respectively), which is accounted for by HIV-1 therapy including protease inhibitors. Shedding of CD163 was shown to predominantly occur from the CD14++CD16- subset after Ficoll isolation and LPS stimulation. Soluble CD163 concentration in plasma from HIV-1 infected donors was similar to HIV-1 uninfected donors. Monocyte CD163 expression in HIV-1 infected patients showed a complicated relationship with classical measures of disease progression. Our findings clarify technical issues regarding CD163 expression on monocyte subsets and further elucidates its role in HIV-associated inflammation by demonstrating that CD163 is readily lost from CD14++CD16- monocytes and induced in pro-inflammatory CD14+CD16++ monocytes by M-CSF. Our data show that all monocyte subsets are potentially capable of differentiating into CD163-expressing anti-inflammatory macrophages given appropriate stimuli. Levels of CD163 expression on monocytes may be a potential biomarker reflecting efforts by the immune system to resolve immune activation and inflammation in HIV-infected individuals.