OBJECTIVES: After people living with HIV (PLWH) start on highly active antiretroviral therapy (HAART), rates of hospitalization for PLWH’s declined, but continued still occurred at high levels.   The increased prevalence of tobacco use among PLWH and paucity of current data provide the rationale to  study if tobacco use might affect cost and clinical benefits of HAART among PLWH. METHODS: A decision-tree model guided our assessment of the impact of tobacco on costs and effectiveness of HAART by race/ethnicity. Using a payer perspective, the probabilities related with smoke habit for racial group (African-Americans, Caribbeans, Hispanics, Caucasians) were extracted from our prior tobacco study (n=560) along with the number of hospitalizations. This information along with hospital bed/day costs, provided by Jackson Memorial Hospital's patient accounting system, was used to estimate the impact of the tobacco with a 1-year time frame. Results were express as cost per hospitalizations related to smoking diseases (HRSD) RESULTS: : Among patients receiving antiretroviral therapy, our data indicated that smoking contributed a $480,029 additional cost/year, with an average of $6,234/HRSD and an incremental cost of $ 4,750 compared to non-smokers in the same treatment group. In the Non-HAART Group, the incremental cost for smokers was $2,064,469, with an average of $8,054/HRSD and an incremental cost of $7,486. When racial group were evaluated for smoking habit, the average costs for Hispanics receiving HAART was $10,975/HRSD. African Americans despite the high cost reported for the total group had an average cost of $8,011/HRSD. CONCLUSIONS: In PLWH receiving HAART, our analysis indicated that the benefits of HAART were negatively impacted by tobacco use and costs are increased in the smokers in both the HAART and Non-HAART groups. The data also indicated that focusing tobacco prevention efforts on minorities may maximize effectiveness in terms of disease prevention and cost reduction