This study investigated HIV seroprevalence and it's correlates among patients with first-time psychiatric admissions to two national referral hospitals in urban Kampala, Uganda. A structured standardised evaluation was used to assess patients for: Diagnostic and Statistical Manual IV psychiatric diagnosis, socio-demographics, sexual behaviour and HIV status (for those HIV-positive, CDC classification and CD4 cell counts). The HIV-1 seroprevalence was 18.4% (95% CI, 13.8-23.0%). Factors that were independently associated with HIV-1 seropositivity were female gender and older age (41+years) and after adjusting for sex and age group, the nature of the current episode (highest among those with first episode of mental illness) and psychiatric diagnoses (highest in the organic affective disorders and delirium, lowest in those with bipolar affective disorder and psychotic syndromes). These results demonstrate that the prevalence of HIV is high among patients with severe mental illness in Africa and that HIV/AIDS adds to the burden of mental illness in high HIV prevalence countries in sub-Saharan Africa. Both HIV care programmes and psychiatric care clinics should be made aware of the frequent association of HIV infection and mental illness, and adopt important diagnostic and care elements of these complementary disciplines in the training and the day-to-day work of clinicians, nurses and counsellors.