Background: The incidence of HIV among persons who inject drugs (PWIDU) has fallen in many nations, likely due to successes of clean needle/syringe exchange and substance abuse treatment and service programs. However in Pakistan, prevalence rates for PWID have risen dramatically. In several cities, prevalence exceeded 20% by 2009 compared to a 2003 baseline of just 0.5%. However, no cohort study of PWID has ever been conducted. Methods: We enrolled a cohort of 636 HIV seronegative PWID registered with three drop-in centers that focus on risk reduction and basic social services in Karachi. Recruitment began in 2009 (March to June) and PWID were followed for two years. We measured incidence rates and risk factors associated with HIV seroconversion. Results: Incidence of HIV was 12.4 per 100 person-years (95% exact Poisson confidence interval [CI]: 10.3-14.9). We followed 474 of 636 HIV seronegative persons (74.5%) for two years, an annual loss to follow-up of <13 per 100 person years. In multivariable Cox regression analysis, HIV seroconversion was associated with non-Muslim religion (Adjusted risk ratio [ARR] = 1.7, 95%CI:1.4, 2.7, p = 0.03), sharing of syringes (ARR = 2.3, 95%CI:1.5, 3.3, p<0.0001), being homeless (ARR = 1.7, 95%CI:1.1, 2.5, p = 0.009), and daily injection of drugs (ARR = 1.1, 95%CI:1.0, 1.3, p = 0.04). Conclusions: Even though all members of the cohort of PWID were attending risk reduction programs, the HIV incidence rate was very high in Karachi from 2009-2011. The project budget was low, yet we were able to retain three-quarters of the population over two years. Absence of opiate substitution therapy and incomplete needle/syringe exchange coverage undermines success in HIV risk reduction.