This study aims to measure the direct and indirect costs of HIV/AIDS care and quality of life (QoL) of HIV-infected patients in Northern Italy. We conducted a prospective cohort study over 12 months, enrolling a sample of 121 patients with HIV infection from two cities in Northern Italy. Patients were surveyed at baseline and were followed-up at 6 and 12 months. To assess the relationship between costs and stage of disease, patients were categorized into three groups at baseline: "No HAART" (asymptomatic and never before on highly active antiretroviral therapy (HAART)), "Stable HAART" (HAART with mild HIV infection and no prior opportunistic infections) and "HAART failure" (primary HAART regimen was altered because of severe side effects or immunological failure). Direct medical costs were based on utilization of (day) hospital admissions, diagnostic procedures, laboratory tests, clinic visits, consultations and antiretroviral drug use. Indirect costs included production losses due to absence from work, reduced productivity at work and reduced unpaid labour participation. QoL was assessed by visual analogue scale. Parametric regression was used to estimate the expected value and the standard deviation of annual costs per patient. The expected value of total annual costs was 1818 euros and 9820 euros and 12,332 euros, for groups "No HAART", "Stable HAART" and "HAART failure" respectively. We estimated annual expected earnings as 14,994 euros and 10,811 euros and 9820 euros for the same respective groups. The expected value of QoL on a scale of 0-1 in these same patient groups was 0.80, 0.78 and 0.64. We conclude that indirect costs contribute substantially to total costs and are comparable in magnitude to the direct costs excluding antiretroviral drugs. The costs of inpatient care in our cohort were almost negligible compared to total costs. Despite being in treatment, many patients were still gainfully employed and generated substantial expected annual earnings.