This study aimed to assess knowledge of and attitudes toward HIV/AIDS among a community in a semi-urban setting in Malaysia, to determine factors affecting perceptions toward people living with HIV in the community, and to provide baseline information for planning preventive measures against HIV/AIDS. This cross-sectional study was conducted in August 2009. Two hundred sixty-two household members were interviewed with a semi-structured questionnaire. Most respondents (232; 88.5%) had heard of HIV/AIDS. Only a few respondents (6; 2.6%) could correctly answer all the questionnaire items. Misconceptions about disease transmission were seen among surveyed participants, such as the belief HIV/AIDS can be contracted from saliva (104; 44.8%), mosquito bites (95; 40.9%) or casual touch (86; 37.1%). A multivariate linear regression model showed better perceptions towards people living with HIV depend on an improved knowledge of HIV/AIDS transmission. Current data emphasize the need to scale up HIV/AIDS education incorporating the mode of disease transmission.