To determine whether maternal placental malaria is associated with an increased risk for perinatal mother-to-child HIV transmission (MTCT), we studied HIV-positive women in western Kenya. We enrolled 512 mother-infant pairs; 128 (25.0%) women had placental malaria, and 102 (19.9%) infants acquired HIV perinatally. Log(10) HIV viral load and episiotomy or perineal tear were associated with increased perinatal HIV transmission, whereas low-density placental malaria (<10,000 parasites/muL) was associated with reduced risk (adjusted relative risk [ARR] 0.4). Among women dually infected with malaria and HIV, high-density placental malaria (greater than or equal to10,000 parasites/muL) was associated with increased risk for perinatal MTCT (ARR 2.0), compared to low-density malaria. The interaction between placental malaria and MTCT appears to be variable and complex: placental malaria that is controlled at low density may cause an increase in broad-based immune responses that protect against MTCT;, uncontrolled, high-density malaria may simultaneously disrupt placental architecture and generate substantial antigen stimulus to HIV replication and increase risk for MTCT.