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Background: Strong health laboratory systems and networks capable of providing high quality services are critical components of the health system and play a key role in routine diagnosis, care, treatment and disease surveillance. This study aimed to assess the readiness of the national health laboratory system (NHLS) and its capacity to support care and treatment of HIV/AIDS in Tanzania. Methods: A documentary review was performed to assess the structure of the health system with reference to the status and capacity of the NHLS to support HIV diagnosis. Key informant interviews were also held with laboratory staff in all levels of the health care delivery system in four regions with different levels of HIV prevalence. Information sought included availability and utilization of laboratory guidelines, quality and the capacity of laboratories for diagnosis of HIV. Results: The findings indicate that a well-established NHLS was in place. However, the coordination of HIV laboratory services was found to be weak. Forty six respondents were interviewed. In most laboratories, guidelines for HIV diagnosis were available but health care providers were not aware of their availability. Utilization of the guidelines for HIV diagnosis was higher at national level than at the lower levels. The low level of awareness and utilization of guidelines was associated with inadequate training and supervision. There was a shortage of human resource, mostly affecting the primary health care level of the system and this was associated with inequity in employment and training opportunities. Laboratories in public health facilities were better staffed and had more qualified personnel than private-owned laboratories. Conclusion: Tanzania has a well established national health laboratory network sufficient to support HIV care and treatment services. However, laboratories at the primary health care level are constrained by inadequate resources and operate within a limited capacity. Improving the laboratory capacity in terms of number of qualified personnel, staff training on the national guidelines, laboratory diagnostic tools and coordination should be given a higher priority. [ABSTRACT FROM AUTHOR]