The social, demographic and economic consequences of the HIV/AIDS pandemic are disturbing for South Africa, and the implications for business are great. The objective of this research was to establish the impact of HIV/AIDS on small and medium-sized enterprises in the manufacturing industry as the majority of employees within this industry are semi- and unskilled and it is this level of employee who has been most severely affected by the epidemic. In addition, the research attempts to analyse how companies have responded to the epidemic and lastly, to determine what has facilitated and hindered their response.The research was conducted using structured, face to face interviews with twenty small to medium organisations in central Gauteng employing from 20 to 300 people. The questionnaire addressed the impact of HIV/AIDS on the organisation and the subsequent response to the epidemic.The findings reveal that SME manufacturing organisations are experiencing the impact of HIV/AIDS, yet there is a disconnect between impact and response. The majority of companies are not proactively taking action to manage the consequences of the epidemic. Factors contributing towards the limited response are: negative implications of stigma, lack of information, perceived cost of response, time required to respond and uncertainty about the role of government. It appears that the long-term economic consequences of the epidemic have not been considered by companies when determining the nature and extent of their response.