OBJECTIVE: To assess the competing effects on HIV incidence in homosexual men of the decreased infectiousness of men with HIV receiving effective combination antiretroviral treatments and homosexual men engaging in unprotected anal intercourse with increased numbers of partners (levels of unsafe sex). METHODS: A mathematical model of HIV transmission in homosexual men was developed, based on the HIV epidemic in Australia in 1996, when effective antiretroviral treatments first became widely available. Uncertainties in parameters were modelled using 1000 simulations. The effect of treatments on decreasing infectiousness was randomly sampled with a median 10-fold decrease in infectiousness (range 100-fold to no decrease). Levels of unsafe sex were randomly sampled with a median 50% increase in unsafe sex (range 100% to no increase). The percentage change in HIV incidence after one year was obtained by comparison with a null model in which there was no decrease in infectiousness as a result of treatment and no change in unsafe sex. RESULTS: Results of the models suggested that whereas increased levels of unsafe sex were linearly associated with increases in HIV incidence, decreases in infectiousness because of treatments were non-linearly associated with decreases in HIV incidence. An assessment of the competing effects suggested that decreases in infectiousness of two-, five-, and 10-fold would be counterbalanced by increases in unsafe sex of approximately 40, 60 and 70%, respectively. CONCLUSION: These models suggest that apparently large decreases in infectiousness as a result of treatment could be counterbalanced in terms of new HIV infections by much more modest increases in unsafe sex.