New advances in human immunodeficiency virus (HIV) monitoring and therapeutics have led to dramatic changes in the course of HIV disease. We evaluated our closed clinic of 425 HIV patients over the period 1995-1998 to determine the cost effectiveness of these changes in care. We found that the costs of antiretroviral therapy tripled over the period of observation, but that these increases were largely offset by major declines in inpatient and home health expenditures. In addition, we found that annual mortality among our HIV patients had declined by 90%. We calculated that the cost per life-year gained is about $17,500, which compares favorably with medical expenditures for renal dialysis or advanced cardiac disease.