Human immunodeficiency virus-1 (HIV-1) infects the central nervous system (CNS) and causes HIV-associated neurocognitive disorders (HAND) in about half of the population living with the virus despite combination anti-retroviral therapy (cART). HIV-1 activates the innate immune system, including the production of type 1 interferons (IFNs) α and β. Transgenic mice expressing HIV-1 envelope glycoprotein gp120 (HIVgp120tg) in the CNS develop memory impairment and share key neuropathological features and differential CNS gene expression with HIV patients, including the induction of IFN-stimulated genes (ISG). Here we show that knocking out IFNβ (IFNβKO) in HIVgp120tg and non-tg control mice impairs recognition and spatial memory, but does not affect anxiety-like behavior, locomotion, or vision. The neuropathology of HIVgp120tg mice is only moderately affected by the KO of IFNβ but in a sex-dependent fashion. Notably, in cerebral cortex of IFNβKO animals presynaptic terminals are reduced in males while neuronal dendrites are reduced in females. The IFNβKO results in the hippocampal CA1 region of both male and female HIVgp120tg mice in an ameliorated loss of neuronal presynaptic terminals but no protection of neuronal dendrites. Only female IFNβ-deficient HIVgp120tg mice display diminished microglial activation in cortex and hippocampus and increased astrocytosis in hippocampus compared to their IFNβ-expressing counterparts. RNA expression for some immune genes and ISGs is also affected in a sex-dependent way. The IFNβKO abrogates or diminishes the induction of MX1, DDX58, IRF7 and IRF9 in HIVgp120tg brains of both sexes. Expression analysis of neurotransmission related genes reveals an influence of IFNβ on multiple components with more pronounced changes in IFNβKO females. In contrast, the effects of IFNβKO on MAPK activities are independent of sex with pronounced reduction of active ERK1/2 but also of active p38 in the HIVgp120tg brain. In summary, our findings show that the absence of IFNβ impairs memory dependent behavior and modulates neuropathology in HIVgp120tg brains, indicating that its absence may facilitate development of HAND. Moreover, our data suggests that endogenous IFNβ plays a vital role in maintaining neuronal homeostasis and memory function.