Objective. To describe the epidemiology of AIDS and HIV infection in Iceland with demographic characteristics and associated risk factors. Design. Survey of national data reported to the Office of the Director General of Public Health in Iceland from November 1985 to December 311994. The dates of diagnosis of HIV infection, AIDS and death due to AIDS were collected from the patients physicians. Patients. All patients diagnosed with HIV and AIDS in Iceland during the study period. Methods. The expanded European AIDS surveillance case definition was used (Lancet 1993 ;341:441). Reporting of individuals with AIDS and HIV infection is semianonymous in Iceland according to the act of law on sexually transmitted diseases. Results. As of December 31 1994 overall 79 males and 14 females were diagnosed with HIV infection. Of those infected 30 males and five females were diagnosed with AIDS. Most of those infected with HIV were 20-29 years old (44%) and most of those diagnosed with AIDS were 30-39 years old (40%). The incidence of AIDS (number of cases/100,000/ year) was 1.36 (2.3 for males and 0.4 for women) during the first 10 years. Of those 35 diagnosed with AIDS 26 died (74%) during this period. The median survival time after the diagnosis of AIDS was 22 months (95% CI; 16-28 months). The majority of the patients with AIDS (91%) and the HIV infected cases (65%) were homosexual or bisexual males but the proportion of those infected by heterosexual contact has been increasing and was at the end of the study period 16%. HIV infection among i.v. drug abusers has been rare in Iceland hitherto. No paediatric cases were observed. Conclusion. The spread of AIDS in Iceland is not as rapid as in many other countries. The incidence rate has not changed significantly during the study period. At the same time the death rate of AIDS patients has been increasing indicating a slowing of the AIDS epidemic. The major changes regarding transmission categories are the increasing proportion of heterosexuals and decreasing proportion of homosexual and bisexual males.