Viruses circulating in Ethiopia during the 1990s cluster with main subtype C, but a significant subcluster, C', was noted in multiple analyses. This subcluster of subtype C(C') was in a fifty-fifty equilibrium with the main subtype C (Abebe et al., AIDS Res Hum Retroviruses 2000;16:1909-1914). To analyze genetic diversification within the subcluster of HIV-1 subtype C designated C' in the course of the epidemic in Ethiopia, we analyzed 165 env gp120 V3 sequences obtained between 1988 and 1999. We observed a highly significant positive correlation between sampling years of individual sequences and their synonymous distances to the reconstructed common ancestor of the HIV-1 subtype C' subcluster. The extrapolation of the regression line of synonymous distances back to the date when no synonymous heterogeneity was present among the Ethiopian HIV-1 C' population allowed us to estimate 1982 (95% CI, 1980-1983) as the year of the onset of HIV-1 C' genetic diversification and expansion in Ethiopia. These results are in agreement with retrospective epidemiological and serological data, which demonstrated the absence of an HIV-1 epidemic in the Ethiopian population before the 1980s.