HIV-1 persists in peripheral blood monocytes in individuals receiving highly active antiretroviral therapy (HAART) with viral suppression, despite these cells being poorly susceptible to infection in vitro. Because very few monocytes harbor HIV-1 in vivo, we considered whether a subset of monocytes might be more permissive to infection. We show that a minor CD16+ monocyte subset preferentially harbors HIV-1 in infected individuals on HAART when compared with the majority of monocytes (CD14 high CD16−). We confirmed this by in vitro experiments showing that CD16+ monocytes were more susceptible to CCR5-using strains of HIV-1, a finding that is associated with higher CCR5 expression on these cells. CD16+ monocytes were also more permissive to infection with a vesicular stomatitis virus G protein-pseudotyped reporter strain of HIV-1 than the majority of monocytes, suggesting that they are better able to support HIV-1 replication after entry. Consistent with this observation, high molecular mass complexes of apolipoprotein B mRNA-editing enzyme, catalytic polypeptide-like 3G (APOBEC3G) were observed in CD16+ monocytes that were similar to those observed in highly permissive T cells. In contrast, CD14 high CD16− monocytes contained low molecular mass active APOBEC3G, suggesting this is a mechanism of resistance to HIV-1 infection in these cells. Collectively, these data show that CD16+ monocytes are preferentially susceptible to HIV-1 entry, more permissive for replication, and constitute a continuing source of viral persistence during HAART.