We conducted a prospective cohort study to describe the association between alcohol use, HIV disease progression, and drug toxicity and to determine health care provider awareness of excessive alcohol use by recruiting 881 HIV-infected veterans (median age, 49 years; 99% male; 54% African American) from 3 VA HIV clinics. Twenty percent of patients were hazardous drinkers by the Alcohol Use Disorders Identification Test, 33% were binge drinkers, 32% had a chart ICD-9 alcohol diagnosis, and 12.5% and 66.7%, respectively, were described by their health care providers as currently and ever drinking "too much." Hazardous/binge drinkers more often had detectable viral loads (P < 0.001). Patients with alcohol diagnoses more often had elevated alanine transaminase or aspartate transaminase levels (P </= 0.02), anemia (P < 0.001), and elevated mean corpuscular volume (P < 0.001). Health care providers missed hazardous drinking in patients with undetectable viral loads (P = 0.01), patients without hepatitis C (P = 0.09), and patients with normal aspartate transaminase levels (P = 0.07) and missed alcohol diagnoses in patients without hepatitis and those with CD4 cell counts of >200/mL. We conclude that in HIV-positive veterans, hazardous drinking and alcohol diagnoses were common and associated with HIV disease progression and/or hepatic comorbidity and anemia. Health care providers more often missed alcohol problems in patients with less severe HIV infection and those without evidence of liver disease. Health care providers should routinely screen and counsel patients regarding alcohol problems as part of standard of care to minimize disease progression and bone marrow and hepatic toxicity.