As predicted by fuzzy-trace theory, people with a range of training—from untrained adolescents to expert physicians—are susceptible to biases and errors in judgment and perception of HIV-AIDS risk. To explain why this occurs, we introduce fuzzy-trace theory as a theoretical perspective that describes these errors to be a function of knowledge deficits, gist-based representation of risk categories, retrieval failure for risk knowledge, and processing interference (e.g., base-rate neglect) in combining risk estimates. These principles explain how people perceive HIV-AIDS risk and why they take risks with potentially lethal outcomes, often despite rote (verbatim) knowledge. For example, people inappropriately generalize the wrong gist about condoms’ effectiveness against fluid-borne disease to diseases that are transferred skin-to-skin, such as HPV. We also describe how variation in processing in adolescence (e.g., more verbatim processing compared to adults) can be a route to risk-taking that explains key aspects of why many people are infected with HIV in youth, as well as how interventions that emphasize bottom-line gists communicate risks effectively.