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Antiretroviral therapy (ART) adherence predicts HIV disease progression and survival, but its effect on direct health care costs is unclear.To determine the effect of ART adherence on direct health care costs among adults in a resource-limited setting.Cohort study.Aid for AIDS, a private-sector disease management program in South Africa.6833 HIV-infected adults who started ART between 6 August 2000 and 30 April 2006.Monthly direct health care costs authorized by Aid for AIDS were averaged over all months. Pharmacy claim adherence, expressed as a percentage, was categorized into quartiles, from 1 (lowest) to 4 (highest). Effects of covariates on monthly total costs were assessed with a 2-step model with logit for probability of nonzero costs and a generalized linear model (GLM).Total mean monthly costs were $370 (SD, $644). Mean monthly costs of ART were $32 (SD, $18); hospitalizations, $151 (SD, $436); consultations, $76 (SD, $66); investigations, $37 (SD, $50); and non-ART medications, $53 (SD, $180). Total mean monthly costs ranged from $313 (SD, $598) for quartile 4 to $376 (SD, $657) for quartile 1. Hospitalization costs increased from 29% to 51% of total costs as adherence decreased. In the GLM 2-step model, moving from adherence quartile 1 to quartile 2, 3, or 4 increased the probability of having nonzero total monthly costs by 0.078, 0.15, and 0.21 percentage point, respectively (P < 0.001). For patients with nonzero costs, increasing adherence from quartile 1 to quartile 2, 3, or 4 decreased total monthly costs by $70, $133, and $192, respectively (P < 0.001). Moving from adherence quartiles 1 to 4 had the highest decrease in net overall median monthly health care costs (–$85 [interquartile range, –$116 to –$41]).Indirect health care costs were not included. Experience may not reflect that of public HIV/AIDS programs.High ART adherence was associated with lower mean monthly direct health care costs, particularly reduced hospitalization costs, in this South African HIV cohort.National Institute of Allergy and Infectious Diseases, John McGoldrick Senior Fellowship for Biostatistics in AIDS Research, and the Doris Duke Charitable Foundation.