BACKGROUND AND OBJECTIVES: Antiretroviral drugs can reduce HIV acquisition among uninfected individuals (as pre-exposure prophylaxis: PrEP) and reduce onward transmission among infected individuals (as antiretroviral treatment: ART). We estimate the potential impact and cost-effectiveness of antiretroviral-based HIV prevention strategies. DESIGN AND METHODS: We developed and analysed a mathematical model of a hyperendemic setting with relatively low levels of condom use. We estimated the prevention impact and cost of various PrEP interventions, assuming a fixed amount of spending on PrEP; investigated the optimal role of PrEP and earlier ART in terms of epidemiological impact and cost; and systematically explored the impact of earlier ART and PrEP, in combination with medical male circumcision services; on HIV transmission. RESULTS: A PrEP intervention is unlikely to generate a large reduction in HIV incidence, unless the cost is substantially reduced. In terms of infections averted and quality adjusted life years gained, at a population-level maximal cost-effectiveness is achieved by providing ART to more infected individuals earlier rather than providing PrEP to uninfected individuals. However, early ART alone cannot reduce HIV incidence to very low levels and PrEP can be used cost-effectively in addition to earlier ART to reduce incidence further. If implemented in combination and at ambitious coverage levels, medical male circumcision, earlier ART and PrEP could produce dramatic declines in HIV incidence, but not stop transmission completely. CONCLUSION: A combination prevention approach based on proven-efficacy interventions provides the best opportunity for achieving the much hoped for prevention advance and curbing the spread of HIV.