Indirect evidence suggests that a significant proportion of vertical transmission of HIV infection occurs late in pregnancy or during delivery. Caesarean section, therefore, may protect the fetus from infection. We looked at 1254 HIV-infected mothers and their children and the effects of different modes of delivery on transmission risk. We also included a detailed assessment of confounding factors associated with transmission risk. Women who had caesarean sections were more advanced in their disease progression which may cause the protective effect of caesarean section to be underestimated. When this and other potential confounding factors were taken into account, caesarean section was estimated to halve the rate of transmission. This finding is important in the design of studies to evaluate treatments aimed at reducing mother-to-child transmission.