About half of all U.S. needle exchange programs are legal, but funding is often unstable and most programs rely on volunteer services to operate. Some programs have made a significant number of referrals to drug treatment and other public health services, although such referrals are limited by the paucity of drug treatment slots. The median annual budget of U.S. and Canadian needle exchange programs is relatively low at $169,000, with government-operated programs tending to be more expensive. Although program clients vary by location, programs generally serve injecting drug users with long drug injection histories who remain at significant risk for HIV infection. Studies of adequately funded needle exchange programs suggest that the programs have the potential to serve a significant proportion of the injecting drug user population. Quantitative data on needle exchange programs are difficult to obtain, but available data do not indicate such programs increase the amount of drug use. Most studies of needle exchange program clients demonstrate decreased rates of HIV drug risk behavior but not decreased rates of HIV sex risk behavior. The authors recommend that bans on the use of Federal funds for needle exchange programs should be repealed, that local communities develop a comprehensive approach to preventing HIV in injecting drug users, and that further research be conducted to assess the effectiveness of needle exchange programs. A list of needle exchange programs throughout the United States is included. 166 references, 2 tables, and 6 figures