INTRODUCTION: Case fatality among in-patients with HIV-associated tuberculosis (HIV-TB) in Africa is high. We investigated the factors associated with mortality in a rural South African hospital. METHODS: This was a prospective observational study of HIV-TB in-patients, with death by 8 weeks the endpoint. RESULTS: Of 99 patients (median CD4 count 72 cells/mm), 32 (32%) died after median 8-day TB treatment. TB was diagnosed microbiologically in 75/99 and clinico-radiologically in 24, with no mortality difference between these groups [31% versus 38% (P = 0.53)]. Median venous lactate was 5.5 mmol/L (interquartile range 3.9-6.2) in those who died and 3.1 mmol/L (interquartile range 2.2-4.1) in survivors (P < 0.001). In multivariable analysis, lactate ≥4 mmol/L [adjusted odds ratio (aOR) 9.8, 95% confidence interval (CI): 3.0 to 32.2], Glasgow Coma Score <15 (aOR 6.6, 95% CI: 1.5 to 29.6), CD4 count <50 cells per cubic millimeter (aOR 5.5, 95% CI: 1.6 to 18.5), and age ≥50 (aOR 7.7, 95% CI: 1.2 to 46.9) independently predicted death. In a nested case-control study, comparing those who died versus CD4-matched survivors, median plasma lipopolysaccharide concentrations were 93 and 57 pg/mL (P = 0.026) and intestinal fatty acid-binding protein, 132 and 0 pg/mL (P = 0.002). CONCLUSIONS: Mortality was high and predicted by elevated lactate, likely reflecting a sepsis-syndrome secondary to TB or bacterial coinfection with intestinal barrier dysfunction appearing to contribute.