BACKGROUND: Transactional sex, or informal sexual exchange, is considered to be an important contributing factor to the disproportionately high HIV infection rates experienced by adolescent girls and young women in sub-Saharan Africa. Nonetheless, confusion remains over how best to define and measure this practice, hindering efforts to mitigate the role of transactional sex in the epidemic. We critically review current measures and offer evidence-based recommendations for improvement. SETTING: Although transactional sex is practiced around the world, we focus attention on the definition and measurement of this practice in sub-Saharan Africa, given the role it plays in young women's risk of HIV in this region. METHODS: We relied on both secondary and primary data sources. We draw on a systematic review of literature on transactional sex from sub-Saharan Africa and interview data from both key informants and cognitive interviews (n = 160) with young women (ages 14-24) and men (ages 18-35) in Uganda and Tanzania. RESULTS: We find current measures are inconsistent, conflate transactional sex with sex work, and fail to capture the gendered nature of the practice. We provide an evidence-based definition of transactional sex that guides our measurement recommendations. We then detail the development of improved measures through cognitive interviews. Finally, we offer recommended approaches to improved measurement of transactional sex for women and men in large-scale surveys. CONCLUSIONS: Improved measures are critical for accurate estimation of the prevalence of transactional sex and assessment of the extent to which transactional sex determines HIV risk.