We describe HIV-1 incidence and the prevalence of genetic subtypes among cocaine users in São Paulo, Brazil. A cross-sectional HIV-1 survey was carried out among 839 current cocaine users attending seven drug treatment units in the São Paulo metropolitan area from 1997 to 1998. HIV-1 subtyping was performed among 41 positive individuals using the heteroduplex mobility assay and DNA sequencing. Participants were mainly male (95.7%) with a history of previous imprisonment (54%), and the mean age was 26.9 years (SD = 7.2). The majority (64.4%) were current crack cocaine users, and 82.1% of the total participants were noninjectors. HIV-1 seroprevalence was 4.9% (95% confidence interval [CI], 3.6%-6.6%), and the incidence (estimated by the sensitive/less-sensitive immunoassay testing strategy) was 0.71% per year (95% CI, 0.07-3.03). HIV-1 subtype B was predominant (90.3%), followed by subtype F. There was no statistically significant association between HIV-1 subtype and specific route of drug administration. Our incidence data show evidence of recent HIV-1 transmission among cocaine users, mainly among noninjectors. Detection of recently infected HIV-1 cases linked to genetic diversity analysis may provide baseline information for public health interventions in this sentinel group.