OBJECTIVES: This study explores the effects of HIV and AIDS on household economics and the social wellbeing of children in HIV-affected families in Cambodia. METHODS: A purposive sample of parents living with HIV and their children was selected from networks of people living with HIV. 'Nearest-neighbour' households served as the comparison group. Interviews were conducted with the parent and at least one child or adolescent in each household between October 2003 and January 2004. The urban/rural sample included 1000 households, 1000 adults, and 1443 children aged 6-17 years, inclusive, and was drawn from Phnom Penh, Battambang and Takeo provinces. RESULTS: Despite similar overall expenditures, HIV-affected households incurred proportionately larger expenditures on medical care and funerals. Income among case households was lower than comparison households. HIV-affected households were more likely to sell off assets, borrow from family members, take out loans, and ration medical care and food for children. Children in HIV-affected households reported eating fewer meals in a day, increased frequency of hunger, and increased household and employment responsibilities compared with comparison children. School enrollment rates were similar between pairs of households. CONCLUSION: The results add to growing evidence that HIV and AIDS contribute to increased vulnerability to poverty and increased burdens on families and children. This study corroborates findings from previous studies in Asia, while providing country-specific information to stakeholders in Cambodia. At this stage in the epidemic, policy makers should focus on implementing and evaluating mitigation interventions.