This paper investigates the connection between incarceration dynamics and acquired immune deficiency syndrome (AIDS) infection rates, with particular emphasis on the black‐white AIDS rate disparity. Using case‐level U.S. data spanning 1982–96, we model the dynamic relationship between AIDS infection rates and the proportion of men in the age‐, state‐, and race‐matched cohort that are incarcerated. We find strong effects of male incarceration rates on male and female AIDS rates. The dynamic structure of this relationship parallels the incubation time between human immunodeficiency virus infection and the onset of full‐blown AIDS. These results persist after controlling for year fixed effects; a fully interacted set of age, race, and state fixed effects; crack cocaine prevalence; and flow rates in and out of prison. The results reveal that higher incarceration rates among black males over this period explain the lion’s share of the racial disparity in AIDS infection among women.