This paper assesses how decentralization of resources and initiatives by the Brazilian National SDT/AIDS Program has impacted the transfer of funds for programs to prevent HIV/AIDS among injecting drug users in Rio de Janeiro, Brazil (1999-2006). The effects of the decentralization policy on Rio de Janeiro's Syringe Exchange Programs (SEPs) are assessed in detail. Decentralization effectively took place in Rio de Janeiro in 2006, with the virtual elimination of any direct transfer from the Federal government. The elimination of direct transfers forced SEPs to seek alternative funding sources. The structure of local SEPs appears to be weak and has been further undermined by current funding constraints. Of 22 SEPs operating in 2002, only two are still operational in 2006, basically funded by the State Health Secretariat and one municipal government. The current discontinuity of SEP operations may favor the resurgence of AIDS in the IDU population. A more uniform, regulated decentralization process is thus needed.