A retrospective review of financial documents, cards and/or registration books of HIV/AIDS clients/patients served/treated in Dil chora Hospital for one year and health workers death information in the last ten years was conducted to assess the impacts of HIV/AIDS on the public sector health care services in Dire Dawa Administrative Council. There were a total of 809 HIV/AIDS service users at Dil chora Hospital from July 2002 to June 2003 out of which 206(25.5%) were HIV test positive. Majority of the HIV test positives and patients treated for opportunistic infections were between the age group of 15 to 50 years. The jobless, illiterate, widowed and divorced were more likely to test positive. The health care system subsidized greater proportion of HIV/AIDS services: only 3.6% and 7.9% of expenditure on VCT and treatment of opportunistic infections were recovered from user fees respectively. Admission of one patient with AIDS case barred on average admissions of two patients with other causes. The record of 16 health care worker’s died of any cause has been found in the last ten years: 75% of them were males, the mean age at death was 31.18 years and 81.25% were health assistants. This study indicated that HIV/AIDS is: directing health care resources to prime age adults (15 to 50 years of age), blocking other patients from in-patient health care. And health care workers are dying prematurely from any cause. Lastly, ascertaining that all segments of the population are reached by IEC, properly targeting subsidy and looking for other possible ways of caring for AIDS cases, and ensuring health care workers safety at work are worth recommending. Key words: HIV/AIDS, cost, impact, public sector, health care.