Children and adolescents with HIV-1 infection and elevated viral loads are at risk for disease progression. When outpatient adherence efforts fail to reduce viral loads, we have chosen to hospitalize patients for directly observed antiretroviral therapy. A retrospective chart review was performed for patients who were admitted for adherence concerns to a rehabilitation facility from December 1, 2000 to December 1, 2003. Differences in CD4 count and viral load at admission, prior to discharge and 6 months after discharge were evaluated using the Wilcoxon signed-ranks test. Nineteen admissions were included in the analysis. Compared to the mean CD4 count at admission (262), the mean CD4 counts at discharge (492) and 6 months after discharge (429) were significantly higher (p < 0.001 and p = 0.01, respectively). Similar results were observed for change in CD4 percentage. Compared to the mean viral load at admission (log 5.7), the mean viral loads at discharge (log 4.7) and 6 months after discharge (log 5) were significantly lower (p < 0.001 and p < 0.004). The majority of admissions (74%) involved a change in highly active antiretroviral therapy (HAART) regimen. In conclusion, hospitalization for directly observed therapy of HIV-1-infected children and adolescents with elevated viral loads and nonadherence resulted in an immediate and sustained (up to 6 months) reduction in viral load and increase in CD4 count.