The study estimated the potential demographic impact of acquired immunodeficiency syndrome (AIDS) in a low-fertility urban setting in sub-Saharan Africa. The prevalence of human immunodeficiency virus (HIV) projected using a deterministic mathematical model was put into the AIDS Impact Model (AIM) of the SPECTRUM Policy Modelling System to estimate the potential demographic impact of AIDS in Addis Ababa, Ethiopia. Demographic indicators from 1984 (the start of the HIV epidemic in Ethiopia) to 2024, including and excluding the HIV epidemic, were compared. Addis Ababa is experiencing a demographic transition in which the total fertility rate has declined from 3.8 to below replacement level over the last 20 years. The prevalence of HIV is predicted to stabilize at 10% in adults, resulting in a total number of people living with HIV at 200,000 and a cumulative number of deaths due to AIDS at 50,000. About 60% of adult deaths can be attributable to AIDS by 2000. The epidemic is predicted to reduce life expectancy by 10 and 17 years in 2000 and 2024 respectively, and to turn to negative, the rate of natural increase after 2009. Accordingly, the rate of natural increase will be -0.18%, -0.35%, and -0.71% per annum by 2009, 2014, and 2024 respectively. Population growth is expected to continue with or without HIV, as a result of high net in-migration, although data for migration are scanty. In a low-fertility urban society of Africa, this study shows the potential for the HIV/AIDS epidemic to turn the rate of natural increase to negative.