OBJECTIVES: In Uganda, 91,000 children are born annually to HIV-positive mothers, approximately 25,000 of which become HIV-infected. New guidelines recommend the use of combination antiretroviral therapy (cART) to prevent vertical transmission. We evaluate the cost-effectiveness of more costly cART relative to other or no preventative therapies. METHODS: Currently, about 48.4% of HIV-positive pregnant women do not receive any preventive therapies and therefore have a 40% risk of transmitting HIV to their child during pregnancy or breastfeeding. This risk can be reduced to 25.8% by single dose nevirapine (sdNVP; Cost: US$0.06), to 17.4% by dual therapy (3TC/AZT; Cost: US$16 for 7 weeks) and to 3.8% by cART (Cost: US$470 for 18 months). At CD4 counts below 350 cells/µl, lifetime cART is indicated for the mother (Cost: US$ 6,883), which reduces future transmission risk in an additional 3.49 pregnancies. The model calculates disability adjusted life years (DALY’s) between therapies based on differences in HIV-transmission to children, which results in shortened life-expectancy. All costs and benefits are discounted at 3% annually. RESULTS: Replacing sdNVP and 3TC/AZT with cART could reduce annual HIV transmissions by 7,500 cases. Preventing one infection averts 23.7 DALY’s. Hence, DALY’s averted using 18 months cART versus sdNVP, 3TC/AZT, and no therapies are 5.21, 3.22, and 8.58, and yield a cost/DALY averted of US$46, US$99, and US$34, respectively. The corresponding figures for lifetime cART are 19.20, 11.87, and 31.60, resulting in a cost/DALY averted of US$205, US$354 and US$172, respectively. CONCLUSIONS: Using the 1 time per capita GDP threshold (US$460), cART as proposed in the new Ugandan guidelines is highly cost-effective relative to other drugs and would generate additional value if treatment could reach greater numbers of women. It remains highly cost-effective even if treatment is continued over the patients’ lifetimes. It is imperative that these guidelines are rapidly implemented.