To model the incremental costs and benefits of a universal antenatal HIV screening programme in New Zealand (NZ). Cost effectiveness analysis, including only health service costs, using secondary data sources and expert opinion. Uncertainty assessed in multi-way sensitivity analyses. The NZ Health Care System. Antenatal population of NZ. Universal antenatal HIV screening programme. Incremental cost per true-positive HIV case detected in mothers; incremental cost per HIV case avoided in babies; and incremental cost per discounted life-year gained, for mothers and babies, due to screening. Using base case values the application of universal screening would cost an additional $NZ 723 607 ($US 307 917) and would lead to the identification of an additional 6.25 true-positive women. After terminations have been excluded, the screening programme would detect five HIV exposed babies. There would be 1.15 avoided cases of HIV infection in babies and a net gain of 41.97 discounted life-years, for mothers and babies combined. The cost per incremental HIV-positive woman detected was $NZ 115 859 ($US 49 301), HIV infected baby avoided $NZ 629 669 ($US 267 944) and discounted life-year gained $NZ 17 241 ($US 7336). The discounted cost per life gained in NZ compares favourably to estimates reported in studies of similar interventions in other developed countries and other health care interventions in NZ. The decision of whether to implement universal screening in NZ would be clarified if the prevalence of antenatal HIV infection was known and policy makers identified their willingness to pay for an additional life-year gained.