BACKGROUND: In Uganda, there have been encouraging reports of reductions in HIV-1 prevalence but not in incidence, which is the most reliable measure of epidemic trends. We describe HIV-1 incidence and prevalence trends in a rural population-based cohort between 1989 and 1999. METHODS: We surveyed the adult population of 15 neighbouring villages for HIV-1 infection using annual censuses, questionnaires, and serological surveys. We report crude annual incidence rates by calendar year and prevalence by survey round. FINDINGS: 6566 HIV-1 seronegative adults were bled two or more times between January, 1990, and December, 1999, contributing 31984 person years at risk (PYAR) and 190 seroconversions. HIV-1 incidence fell from 8.0 to 5.2 per 1000 PYAR between 1990 and 1999 (p=0.002, chi(2) for trend). Significant sex-specific and age-group-specific reductions in incidence were evident. Incidence was 37% lower for 1995-99 than for 1990-94 (p=0.002, t-test). On average, 4642 adult residents had a definite HIV-1 serostatus at each yearly survey round. HIV-1 prevalence fell significantly between the first and tenth annual survey rounds (p=0.03, chi(2) for trend), especially among men aged 20-24 years (6.5% to 2.2%) and 25-29 years (15.2% to 10.9%) and women aged 13-19 years (2.8% to 0.9%) and 20-24 years (19.3% to 10.1%) (all p<0.001, chi(2) for trend). INTERPRETATION: Our findings of a significant drop in adult HIV-1 incidence in rural Ugandans give hope to AIDS control programmes elsewhere in sub-Saharan Africa where rates of HIV-1 infection remain high.