Myeloid dendritic cells (DCs) can capture HIV-1 via the receptor CD169/Siglec-1 that binds to the ganglioside, GM3, in the virus particle membrane. In turn, HIV-1 particles captured by CD169, an I-type lectin, whose expression on DCs is enhanced upon maturation with LPS, are protected from degradation in CD169+ virus-containing compartments (VCCs) and disseminated to CD4+ T cells, a mechanism of DC-mediated HIV-1 trans-infection. In this study, we describe the mechanism of VCC formation and its role in immune evasion mechanisms of HIV-1. We find HIV-1-induced formation of VCCs is restricted to myeloid cells, and that the cytoplasmic tail of CD169 is dispensable for HIV-1 trafficking and retention within VCCs and subsequent trans-infection to CD4+ T cells. Interestingly, introduction of a di-aromatic endocytic motif in the cytoplasmic tail of CD169 that results in endocytosis of HIV-1 particles, suppressed CD169-mediated HIV-1 trans-infection. Furthermore, super-resolution microscopy revealed close association of CD169 and HIV-1 particles in surface-accessible but deep plasma membrane invaginations. Intriguingly, HIV-1 particles in deep VCCs were inefficiently accessed by anti-gp120 broadly neutralizing antibodies, VRC01 and NIH45-46 G54W, and thus were less susceptible to neutralization. Our study suggests that HIV-1 capture by CD169 can provide virus evasion from both innate (phagocytosis) and adaptive immune responses.