Informal caregivers worldwide are faced with the dilemma of maintaining their health and meeting the caregiving demands of their loved ones. This study explores the health outcomes of caregiving, caregivers’ health-promoting practices and the challenges to providing care among caregivers to children orphaned by AIDS in southwest Uganda. A descriptive design and interview questionnaires were used to collect data from 204 caregivers. The average age of the caregivers was 41.36 (±10.9) years and most of them (53%) were grandmothers to the orphans. The majority (65%) of the caregivers were caring for at least three orphans, had been in the caregiver role for more than five years (61%), and stated that their health had been negatively impacted by caregiving (61%). According to self-reports, the most common new health problems since taking up the caregiving role were chronic ill health (97%), social isolation (95%) and mental stress (92%). The health-promoting practices most often engaged in were eating a balanced diet (67%), seeking spiritual support (58%), and performing self-care activities (44%). The challenges to caregiving most often reported were poverty (88%) and a lack of time to seek personal medical care (59%). The predictors of self-reported poor health among the caregivers were stress (odds ratio [OR] = 3.43; p = 0.01), caring for three or more orphans (OR = 2.19; p = 0.01), female gender (OR = 1.77; p = 0.01), and having spent more than five years as a caregiver to an orphan (OR = 1.35; p = 0.01). The findings suggest that caregivers commonly experience poor health and their health-promoting practices are inadequate. There is a need for organised and formal health-promotion programmes for caregivers of children orphaned by AIDS, especially in rural areas of developing countries. Interventions for health promotion can be achieved through integrated programmes that provide health education, social services, respite from caregiving and counselling.