One pathological hallmark of HIV-1 infection is chronic activation of the immune system, driven, in part, by increased expression of proinflammatory cytokines. The host attempts to counterbalance this prolonged immune activation through compensatory mediators of immune suppression. We recently identified a gene encoding the proinflammatory cytokine IL-32 in microarray studies of HIV-1 infection in lymphatic tissue (LT) and show in this study that increased expression of IL-32 in both gut and LT of HIV-1 - infected individuals may have a heretofore unappreciated role as a mediator of immune suppression. We show that: 1) IL-32 expression is increased in CD4+ T cells, B cells, macrophages, dendritic cells, and epithelial cells in vivo; 2) IL-32 induces the expression of immunosuppressive molecules IDO and Ig-like transcript 4 in immune cells in vitro; and 3) in vivo, IL-32-associated IDO/Ig-like transcript 4 expression in LT macrophages and gut epithelial cells decreases immune activation but also may impair host defenses, supporting productive viral replication, thereby accounting for the correlation between IL-32 levels and HIV-1 replication in LT. Thus, during HIV-1 infection, we propose that IL-32 moderates chronic immune activation to avert associated immunopathology but at the same time dampens the antiviral immune response and thus paradoxically supports HIV-1 replication and viral persistence.