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In Australia, sterile needles are distributed to people who inject drugs through formal services for the purposes of limiting the transmission of blood borne viruses (BBV). Secondary exchange (SE) involves people acquiring needles from formal services and redistributing them to others. This paper describes the extent, patterns and contexts of SE in south east Sydney, Australia and examines whether SE is independently associated with BBV risk practices. SE is a common activity in south east Sydney but does not appear to be highly organised, usually taking place in small networks of friends and/or partners for altruistic reasons. Harm reduction programs could capitalise on the prevalence of SE to reach injecting drug users who do not use formal distribution services.