It is widely accepted that changes in sexual behaviour in the mid-1980s drastically reduced the spread of human immunodeficiency virus (HIV) through male homosexual contact in Western countries, but documentation of changes in infection rates has been based on observation of subjects enrolled in cohort studies, who may be highly selected and motivated. In this study, the incidence of HIV seroconversion was investigated among people attending a major site of HIV testing, counselling and patient care in Sydney. Over the period March 1985 to June 1990, 2,301 people were tested for HIV antibody on more than one occasion, following a negative result at the first test. On the basis of subsequent tests, 107 were found to have seroconverted during the study period, including 91 men who reported homosexual or bisexual contact as their only exposure to HIV. Overall, the incidence rate of HIV infection among men reporting homosexual or bisexual contact was 404 per 100 person-years of follow-up. Under various methods of calculation, the incidence was estimated to have declined between 1985 and 1989-1990. However, there was continuing HIV seroconversion in 1989-1990 and no indication of declining incidence in younger men. The fall in HIV incidence documented in this study supports the role of HIV prevention programs aimed at homosexual and bisexual men.