This report aims to provide an overview of selected likely development impact of Human Immunodeficiency Virus (HIV) and Acquired Immune Deficiency Syndrome (AIDS) for Lesotho. The purpose is to engage in a dialogue with the Government, relevant stakeholders and the donor community on the appropriate actions to pursue in support of the Government's recently developed strategy on the epidemic. This report is to assist policy makers in Lesotho in their effort to incorporate HIV/AIDS into the planning process on a regular basis. As such, it is directed at officials at the ministries of finance and development planning. It employs conventional demographic and economic models to analyze selected development impacts of HIV/AIDS on the economy, thereby providing an illustration of how these impacts can be incorporated in the regular planning processes (including annual budgeting) in the finance and development ministries of the Government. It points out the need for monitoring the progression of the epidemic through further research and improvements in existing instruments. The report identifies three areas where the HIV/AIDS impact is severe and need further appropriate studies: a) household; b) public sector; and c) integration of HIV/AIDS into planning models and decision making.