The first children with HIV-1 infection were described in 1983. As of 1998, the global HIV epidemic is having a profound impact on the health and survival of children. Almost all HIV infections among young children are due to vertical transmission, and the intrapartum period appears to provide us with a crucial window of opportunity for prevention. Postnatal transmission through breastfeeding also contributes an estimated one third to one half of vertical transmission worldwide. Carefully conducted epidemiologic studies are elucidating the immunologic, virologic, and behavioral factors affecting the risk of HIV-1 transmission from mother to infant and the natural history of HIV disease in perinatally infected children. Transmission of HIV-1 is influenced by many factors, and a high maternal viral load is insufficient to fully explain vertical transmission of HIV-1. Pediatricians and other providers should counsel HIV-infected women about the means available to decrease the risk of HIV transmission to the infant. However, the majority of HIV-infected children are born in the developing world, and a crucial challenge is to identify safe and effective interventions that are feasible in those countries with the most significant HIV burden.