Objective: To estimate the age and sex-specific prevalence of HIV infection in the population of Addis Ababa, Ethiopia. Design: Two-stage cluster sampling of the population aged 0–49 years of Addis Ababa, using kebeles (urban dwelling associations) as clusters. Methods: The sera used for this study were collected in an earlier study (1994) on the rate of acquisition of antibodies against measles, rubella, and hepatitis B. After separate approvals were obtained from the institutional ethics committees, sera were tested by enzyme-linked immunosorbent assay confirmed by Western blot. Age- and sex-specific HIV prevalence rates were estimated. The prevalence of HIV in men and women over 15 years of age was compared by calculating age-standardized HIV prevalence, using the age distribution of the census population as the standard. A time-dependent catalytic model was used to obtain crude estimates of HIV incidence from age-prevalence data. Results: A total of 3853 sera were available for analysis. The prevalence of HIV in adults was 6.0% [95% confidence interval (CI), 4.5–7.4%] for men and 6.9% (95% CI, 5.3–8.5%) for women, with peak prevalence in the 25–29 year age group of 16.3 and 11.8%, respectively. After standardization for age using the direct method, the HIV prevalence ratio comparing adult men with women was 0.97 : 1 (95% CI, 0.70 : 1 – 1.35 : 1). Three children aged less than 5 years were HIV-positive. The prevalence of HIV among adults ranged from 0–21.3% in different clusters, indicating the heterogeneity of the spread of HIV in the city. HIV prevalence estimates among the antenatal clinic patients of Addis Ababa in 1996 far exceeded the estimates obtained during the community survey, particularly in the youngest age group (15–24 years). Estimates of HIV incidence (per susceptible person per annum) for the age group 16–22 years ranged from 1.3–2.25% for men and from 2.1–2.4% for women. Conclusion: By 1994, a substantial proportion of the adult population of Addis Ababa was infected with HIV. Promotion of behavioural changes and the control of sexually transmitted diseases should be strongly supported to limit the spread of the HIV epidemic in Ethiopia.