The aim of this study was to report on the epidemiology of HIV infection in Estonia and to molecularly characterize Estonian HIV-1 variants. Epidemiological data were obtained from the Estonian National HIV/AIDS Database. In 1995-1996 blood samples were collected from 54 of the 65 HIV-infected individuals that had been diagnosed at that time. The V3 domain of the env gene was directly sequenced from peripheral blood mononuclear cells of 49 of these 54 individuals and the sequences used for phylogenetic analyses. At the end of 1999 Estonia reported 96 diagnosed HIV cases; 46 (48%) were homosexual or bisexual men and 31 (32%) were presumed to have been infected heterosexually. Importantly, only four individuals were likely to have become infected through intravenous drug use. Forty-three individuals (45%) were presumed to have been infected outside of Estonia, whereas 38 (40%) were likely to have become infected in Estonia. As expected, a majority of the investigated individuals (80%) were found to carry subtype B virus. Infections with subtypes A, C, D, G, and CRF02_AG were also documented. The dominance of subtype B was restricted to homosexual and bisexual men. Thus, subtype B infections were documented in 33 of 34 (97%) homosexual and bisexual men, but only 6 of 15 (40%) individuals with other probable routes of infection. Thirty of the 39 subtype B sequences were joined in a tight sequence cluster that also included sequences from neighboring Russia and Lithuania. This pattern suggests a local spread of HIV-1 among homosexual and bisexual men within the region. The results from the phylogenetic analyses agreed well with other epidemiological information. In conclusion, Estonia remains a country with a low prevalence of HIV infection. A majority of the identified cases are homosexual or bisexual men, whereas HIV infection among intravenous drug users is rare. A large proportion of the homosexual and bisexual men carried closely related subtype B variants. The sequences have been deposited in GenBank under accession numbers AF286538-AF286586.