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To describe prevalence and incidence of HIV-1, hepatitis C virus (HCV) and risk behaviours in a prospective cohort of injecting drug users (IDU).Vancouver, which introduced a needle exchange programme (NEP) in 1988, and currently exchanges over 2 million needles per year.IDU who had injected illicit drugs within the previous month were recruited through street outreach. At baseline and semi-annually, subjects underwent serology for HIV-1 and HCV, and questionnaires on demographics, behaviours and NEP attendance were completed. Logistic regression analysis was used to identify determinants of HIV prevalence.Of 1006 IDU, 65% were men, and either white (65%) or Native (27%). Prevalence rates of HIV-1 and HCV were 23 and 88%, respectively. The majority (92%) had attended Vancouver's NEP, which was the most important syringe source for 78%. Identical proportions of known HIV-positive and HIV-negative IDU reported lending used syringes (40%). Of HIV-negative IDU, 39% borrowed used needles within the previous 6 months. Relative to HIV-negative IDU, HIV-positive IDU were more likely to frequently inject cocaine (72 versus 62%; P < 0.001). Independent predictors of HIV-positive serostatus were low education, unstable housing, commercial sex, borrowing needles, being an established IDU, injecting with others, and frequent NEP attendance. Based on 24 seroconversions among 257 follow-up visits, estimated HIV incidence was 18.6 per 100 person-years (95% confidence interval, 11.1-26.0).Despite having the largest NEP in North America, Vancouver has been experiencing an ongoing HIV epidemic. Whereas NEP are crucial for sterile syringe provision, they should be considered one component of a comprehensive programme including counselling, support and education.