We described levels of habitual physical activity and physical capacity in HIV patients initiating antiretroviral treatment in Ethiopia and assessed the role of HIV and nutritional indicators on these outcomes. Physical activity energy expenditure (PAEE) and activity levels were measured with combined heart rate and movement sensors. Physical capacity was assessed by grip strength, sleeping heart rate and heart rate economy. Grip strength data was also available from a sex- and age-matched HIV-negative reference group. Median PAEE was 27·9 (interquartile range 17·4–39·8) kJ/kg per day and mean±s.d. grip strength was 23·6 ± 6·7 kg. Advanced HIV disease predicted reduced levels of both physical activity and capacity; e.g. each unit viral load [log(1+copies/ml)] was associated with –15% PAEE (P < 0·001) and –1·0 kg grip strength (P < 0·001). Grip strength was 4·2 kg lower in patients compared to HIV-negative individuals (P < 0·001). Low body mass index (BMI) predicted poor physical activity and capacity independently of HIV status, e.g. BMI <16 was associated with −42% PAEE (P < 0·001) and −6·8 kg grip strength (P < 0·001) compared to BMI ⩾18·5. The study shows that advanced HIV and malnutrition are associated with considerably lower levels of physical activity and capacity in patients at initiation of antiretroviral treatment.