PURPOSE: To determine the cost effectiveness of incorporating molecular testing for high-risk types of human papillomavirus into a cervical cancer screening program for women infected with the human immunodeficiency virus (HIV). SUBJECTS AND METHODS: We developed a Markov model to simulate the natural history of cervical cancer precursor lesions in HIV-infected women. Probabilities of progression and regression of cervical lesions were conditional on transient or persistent infection with human papillomavirus, as well as stage of HIV and effectiveness of antiretroviral therapy. Incorporating data from prospective cohort studies, national databases, and published literature, the model was used to calculate quality-adjusted life expectancy, life expectancy, lifetime costs, and incremental cost-effectiveness ratios for two main strategies: targeted screening - human papillomavirus testing is added to the initial two cervical cytology smears obtained after an HIV diagnosis and subsequent screening intervals are modified based on the test results; and universal screening - no testing for human papillomavirus is performed, and a single cytology screening interval is applied to all women. RESULTS: In HIV-infected women on anti-retroviral therapy, a targeted screening strategy in which cervical cytology screening was conducted every 6 months for women with detected human papillomavirus DNA, and annually for all others, cost $10,000 to $14,000 per quality-adjusted life year gained compared with no screening. A universal screening strategy consisting of annual cervical cytology for all women was 15% less effective and had a less attractive cost-effectiveness ratio. Targeted screening remained economically attractive in multiple sensitivity analyses, although when the overall incidence of cervical cancer precursor lesions was lowered by 75%, the screening interval for women with detected human papillomavirus DNA could be widened to 1 year. CONCLUSIONS: Adding human papillomavirus testing to the two cervical cytology smears obtained in the year after an HIV diagnosis, and modifying subsequent cytology screening intervals based on the results, appears to be an effective and cost-effective modification to current recommendations for annual cytology screening in HIV-infected women.