SETTING Severe skin reactions due to thiacetazone (T) in Human Immunodeficiency Virus (HIV) positive tuberculosis patients have been reported in several publications, one of them from Kenya. However, the abandoning of T may not be feasible in Kenya as this may increase the cost of drugs by about three-fold per regimen. OBJECTIVE To compare the cost-effectiveness and total cost of three strategies in which T is replaced with ethambutol (E). DESIGN Three strategies are compared with a baseline strategy in which T is not replaced. The indicator for cost-effectiveness is the cost-per-averted-death attributable to T. RESULTS Education of patients on the possibility of side-effects and replacement of T with E is the most cost-effective strategy at HIV prevalence rates of 1-90%. Abandonment of T and replacement with E is the most cost-effective at over 90% HIV prevalence. CONCLUSION In Kenya, education of patients on the possibility of skin reactions should be preferred at low range HIV prevalence rates. Routine HIV testing would be the most attractive strategy in the middle range, and total replacement of T with E is to be preferred in the higher range of HIV prevalence.