According to World Health Organisation (WHO) estimates, one in every 100 people in the 15 to 49 age group may be infected with HIV, Maarike Harro, director of the National Institute for Health Development, told a news conference.
"The infection of people with HIV is out of control in Estonia," Harro warned.
A total of 4,910 people in Estonia were registered with the authorities as being infected by HIV, and 468 new cases were added in 2005.
The population of Estonia, which joined the European Union last year, is 1.4 million.
"In cases per million people, Estonia is in the worst position in the world, outside Africa," Harro said.
"There are many unregistered cases in Estonia, so the figure of the HIV-positive people may be one- or even two-thirds higher than the official figure," Social Affairs Minister Jaak Aab told journalists.
Harro said that although the number of cases had fallen since last year, "We have to take urgent measures to combat AIDS and HIV."
The Global Fund to Fight AIDS allocated 80 million kroons (five million euros, 6.2 million dollars) to Estonia Friday to combat the spread of AIDS in the next three years.
The money comes in addition to 50 million kroons (3.2 million euros, 3.9 million dollars), which the Global Fund gave to Estonia for the years 2003-2005.
"The aim of the Global Fund programme in Estonia is to stem the spread of HIV by the year 2007," she said.
The groups most affected by HIV in Estonia are young people in the capital Tallinn and the mainly Russian-populated eastern part of the country.
Sixty-five percent of those infected with HIV are under 25, while men aged 20-24 who are intravenous drug users are the biggest risk group.
Women make up one third of the newly registered cases of HIV, outnumbering men in the 15 to 19 age group.
A total of 73 people are registered in Estonia as having developed full-blown AIDS.
"We have to work closely with schools, army recruitment centres and organisations working to integrate non-Estonians, to reach possible at-risk groups," Harro said.