As of September 30, 1996, a total of 566,002 acquired immunodeficiency syndrome (AIDS) cases, including 7472 cases among children ages < 13 years (1%), had been reported to CDC by state and territorial health departments. Most children reported with AIDS acquired human immunodeficiency virus (HIV) infection perinatally from their mothers. During 1988-1993, an estimated 6000-7000 children were born each year to HIV-infected women; an estimated 1000-2000 of these children were infected annually. In 1994, results of clinical trials demonstrating effective therapy for reducing perinatal HIV transmission indicated a two-thirds decrease in such transmission associated with zidovudine (ZDV) therapy for HIV-infected pregnant women and their newborns. The Public Health Service (PHS) issued recommendations in 1994 for ZDV treatment to reduce perinatal HIV transmission, and in 1995 for routine HIV counseling and voluntary testing for all pregnant women in the United States. This report summarizes the epidemiology of AIDS in children in the United States reported cumulatively from 1982 through September 1996, presents rates for 1995 (the most recent year for which census estimates are available), and describes a recent decrease in the rate of perinatally acquired AIDS.