OBJECTIVES: According to national guidelines, HIV-positive patients in Uganda are to be initiated on combination antiretroviral therapy (cART) at a CD4+ T-cell (CD4) count below 250 cells/µl. However, cART initiation at higher CD4 counts increases survival, albeit at higher lifetime treatment cost. This analysis evaluates the cost-effectiveness of initiating cART at CD4 counts between 250 – 349 cells/µl vs. current guidelines. METHODS: The average CD4 decline in untreated patients with CD4 counts below 550 cells/µl occurs at a rate of 96.6 cells/µl annually. Life expectancy of cART-treated patients, conditional on baseline CD4 count, is modeled based on published literature. First line cART costs US$192 annually, with an additional US$113 per year for patient monitoring. Delay of cART until the CD4 count falls below 250 cells/µl incurs the cost of the bi-annual CD4 test and cost of routine maintenance care at US$85 annually. The analysis compares lifetime treatment costs and disability adjusted life-expectancy between early vs. delayed cART for ten baseline CD4 count ranges from 250-259 to 340-349 cells/µl. All costs and benefits are discounted at 3% annually. RESULTS: Treatment delay varies from 0.5 year (CD4: 250-299) – 1 year (CD4: 300-349). Early cART initiation increases life expectancy between 1.48 and 3.01 years and averts 1.31 – 2.67 disability adjusted life years (DALY’s) per patient. Lifetime treatment costs are US$4255 – US$5210 for early initiation and US$3755 – US$4307 for delayed initiation. The cost/DALY averted of the early versus delayed start ranges from US$354 – US$362. CONCLUSIONS: In HIV-positive patients presenting with CD4 counts between 250-350 cells/µl, immediate initiation of cART is a highly cost-effective strategy using the recommended 1 time per capita GDP threshold of $460 reported for Uganda.  Expanding the number of treatment slots to include patients with higher CD4 counts would constitute an efficient use of scarce health care dollars.