A high percentage of HIV-1-infected infants and children in Romania are coinfected with hepatitis B virus. Little information is available on the impact of concurrent hepatitis B infection on the course of HIV-1 infection. We conducted a prospective cohort study over 1 year in a group of 68 HIV-1-infected infants and children to determine whether hepatitis B surface antigenemia, neopterin, and β2-microglobulin (B2M) predicted death. Among the 44 hepatitis B surface antigen-positive (HBsAg+) subjects at enrollment, 13 (30%) died during 1 year of follow-up. In comparison, two of 24 (8%) HBsAg-negative subjects died (RR = 7.7; p = 0.05). Higher initial serum concentrations of neopterin and B2M were negatively associated with survival. After stratifying by baseline clinical evidence of HIV-related disease, survival was negatively associated with HBsAg+status (p = 0.04) in 33 children in stage P-2, adjusting for age, serum neopterin, and serum B2M levels. The results of this study suggest that serum neopterin is a marker for severity of clinical illness and that HBsAg+status increases the mortality rate among children with clinical evidence of HIV infection.