BACKGROUND: HIV is a major cause of disease and death in sub-Saharan Africa. Provision and scale-up of antiretroviral therapy (ART) in resource-limited settings is feasible and cost-effective. Initiation of ART is guided by WHO stage or CD4 cell count; the latter may not be available and up to 70% of eligible individuals are not identified. Low-cost CD4 cell count tests are comparable to conventional methods. We compared the direct healthcare costs and benefits using routine and low-cost CD4 cell count versus WHO staging to initiate ART. METHODS: Using a Markov state transition model, we incorporated costs, survival and quality of life. We compared the direct healthcare costs and benefits in quality-adjusted life years gained using routine and low-cost CD4 cell count versus WHO staging to initiate ART. We estimated an incremental cost-effectiveness ratio in US$ per quality-adjusted life year gained and compared with threshold of gross domestic product per capita. Uncertainty was assessed by sensitivity analysis. RESULTS: Routine and low-cost CD4 cell counts compared to WHO staging to guide initiation of ART improved quantity and quality of life and appears to be very cost-effective. The base case estimated an incremental cost-effectiveness ratio of US$939 and US$85 per quality-adjusted life years gained, respectively, and well below the cost effectiveness thresholds of gross domestic product per capita. CONCLUSION: Routine or low-cost CD4 cell count compared to WHO staging, to guide initiation of ART, is a very cost-effective intervention for sub-Saharan Africa and should be an integral part of the scale-up of ART programs.