BACKGROUND: In 2001, South Africa began implementing the Prevention of Mother-to-Child Transmission of HIV (PMTCT) programme. This programme included distribution of free formula milk for infants up to 6 months of age at all public health facilities. Effective from 1 January 2011, KwaZulu-Natal became the first province to phase out free formula milk from its PMTCT programme. On 23 August 2011, the South African National Department of Health adopted promotion of exclusive breastfeeding as the national infant feeding strategy and made a decision to withdraw free formula milk from the PMTCT programme. OBJECTIVE: To explore the perceptions and understanding of households at community level on the policy decision to phase out free formula milk from the PMTCT programme in South Africa. METHODS: An exploratory qualitative study was conducted amongst women enrolled in a community randomized trial known as Good Start III. Focus group discussions were held with grandmothers, fathers and teenage mothers; and in-depth interviews were performed with HIV-positive and HIV-negative mothers. Data were analysed using thematic analysis. RESULTS: Identified themes included: (1) variations in awareness and lack of understanding of the basis for the policy change, (2) abuse of and dysfunctional policy as perceived reasons for policy change and (3) proposed strategies for communicating the policy change. CONCLUSION: There is an urgent need to develop a multifaceted communication strategy clearly articulating the reasons for the infant feeding policy change and promoting the new breastfeeding strategy. The communication strategy should take into account inputs from the community. With a supportive environment and one national infant feeding strategy, South Africa has an opportunity to reverse years of poor infant feeding practices and to improve the health of all children in the country.