OBJECTIVES: The objectives of this study were to estimate the cost-effectiveness of a harm reduction intervention among injecting drug users (IDUs) in Odessa, Ukraine; and to explore how the cost-effectiveness changes if the intervention were scaled up to 60% as recommended by WHO/UNAIDS. STUDY DESIGN: Economic providers' costs were estimated. A dynamic mathematical model, fitted to epidemiologic data, projected the intervention's impact. The cost per HIV infection averted for different intervention coverages was estimated. RESULTS: From September 1999 to August 2000, at the current coverage of between 20% to 38% and an injection drug user (IDU) HIV prevalence of 54%, projections suggest 792 HIV infections were averted, a 22% decrease in IDU HIV incidence, but a 1% increase in IDU HIV prevalence. Cost per HIV infection averted was $97. Scaling up the intervention to reach 60% of IDUs remains cost-effective and reduces HIV prevalence by 4% over 5 years. CONCLUSION: At the current coverage, the harm reduction intervention in Odessa is cost-effective but is unlikely to reduce IDU HIV prevalence in the short-term. To reduce HIV prevalence, more resources are needed to increase coverage.