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Background: Tanzania is one of African countries that have since 1983 been facing the human immuno-deficiency virus-acquired immune-deficiency syndrome (HIV-AIDS) pandemic, thereby, drawing attention to the general public, the governmental and non-governmental organizations and government’s partner development agencies. Due to few socio-economic studies done so far to evaluate the impact this pandemic, a study was designed and undertaken in 2001 to analyse how this disease had impacted on health service provision in Tanzania from a cost perspective.Methods: The study involved a review of health service management information documents at selected health facilities in nine regions within mainland Tanzania, interviews with health service workers (HWs) at selected health facilities and health managers at district and regional levels as well as focus group discussions with people living with HIV/AIDS (PLWA).Findings: We noted that on average, HIV/AIDS caused 72% of all the deaths recorded at the study hospitals. The health management information system (HMIS) missed some data in relation to HIV/AIDS services, including the costs of such services which limited the investigators’ ability to determine the actual costs impact. Using their experience, health managers and HWs reported substantial amounts of funds, labour time, supplies and other resources to have been spent on HIV/AIDS preventive and curative services. The frontline HWs reported to face a problem of identifying the PLWA among those who presented multiple illness conditions at HF levels which means sometimes the services given to such people could not be separated for easy costing from services delivered to other categories of the patients. Such respondents and their superiors (i.e. Health managers) testified that PLWA were being screened and receiving treatment. HWs were concerned with spending much time on counselling PLWA, attending home-based care, sick-leaves and funeral ceremonies either after their relatives or co-staff have died of AIDS, lowering time for delivering services to other patients. HWs together with their superiors at district and regional levels reported increasing shortages of essential supplies, office-working space and other facilities at HF levels, although actual costs of such items were not documented.Conclusion: The cost impact of HIV/AIDS to the health sector is undoubtedly high even though it is not easy to establish the cost of each service delivered to PLWA in Tanzania. As adopted in the present study, designers of methods for analysing impacts of diseases like this should consider a mixture of both quantitative and qualitative techniques. Meanwhile concerted measures are needed to improve health service record keeping so as enhancing data usability for research and rational management decision-making purposes.