Recent empirical studies and analyses have heightened interest in the use of expanded antiretroviral therapy (ART) for prevention of HIV transmission. However, ART is expensive, approximately $600 per person per year, raising issues of the cost and cost-effectiveness of ambitious ART expansion. The goal of this review is to equip the reader with the conceptual tools and substantive background needed to understand and evaluate the policy and programmatic implications of cost-effectiveness assessments of ART for prevention. We provide this review in six sections. We start by introducing and explaining basic concepts of health economics as they relate to this issue, including resources, costs, health metrics (such as Disability-Adjusted Life Years), and different types of economic analysis. We then review research on the cost and cost-effectiveness of ART as treatment, and on the cost-effectiveness of traditional HIV prevention. We describe critical issues in the epidemic impact of ART, such as suppression of transmission and the role of the acute phase of infection. We then present a conceptual model for conducting and interpreting cost-effectiveness analyses of ART as prevention, and review the existing preliminary estimates in this area. We end with a discussion of future directions for programmatic demonstrations and evaluation.