OBJECTIVE To assess the incidence and risk factors for hepatotoxicity associated with nevirapine. METHODS A prospective cohort study in a teaching and referral hospital involving all consecutive patients who were prescribed a nevirapine-containing antiretroviral regimen between September 1997 and May 2000. METHODS Cutaneous and hepatic adverse reactions and clinical hepatitis were assessed. Blood analysis including plasma HIV-1 RNA CD4 cell counts, liver chemistry tests, and serology for hepatitis B and C viruses. Hepatotoxicity was defined as an increase of at least threefold in serum alanine aminotransferase or aspartate aminotransferase levels compared with baseline values. RESULTS Of a total of 610 patients, 82 (13.4%) were antiretroviral naive when commencing nevirapine, and 46.2 and 8.9% were coinfected with hepatitis C and B viruses, respectively. Median duration of exposure to nevirapine was 8.7 months (interquartile range 3.4--14.3). Hepatotoxicity developed in 76 (12.5%), an incidence of 13.1/100 person-years. Kaplan--Meier estimated incidence of hepatotoxicity at 3, 6 and 12 months was 3.7, 9.7 and 20.1%, respectively. In seven (1.1%) patients, hepatotoxicity was associated with clinical hepatitis, which was reversible upon discontinuation of therapy. Multivariate analysis identified the duration of prior exposure to antiretroviral drugs, hepatitis C virus, and higher baseline levels of alanine aminotransferase as independent risk factors for hepatotoxicity. CONCLUSIONS Hepatotoxicity but not clinical hepatitis was common in HIV-1-infected patients receiving nevirapine-containing regimens and the incidence steadily increased over time. Prolonged exposure to any antiretroviral therapy, coinfection with hepatitis C virus and abnormal baseline levels of alanine aminotransferase identified patients at a higher risk.