BACKGROUND: Community-based models of antiretroviral therapy (ART) delivery are widely discussed as a priority in the expansion of HIV treatment services, but data on their effectiveness are limited. We examined outcomes of ART patients decentralized to community-based adherence clubs (CACs) in Cape Town, South Africa and compared these to patients managed in the community health center. METHODS: The analysis included 8150 adults initiating ART from 2002 to 2012 in a public sector service followed until the end of 2013. From June 2012, stable patients (on ART >12 months, suppressed viral load) were referred to CACs. Loss to follow-up (LTFU) was compared between services using proportional hazards models with time-varying covariates and inverse probability weights of CAC participation. FINDINGS: Of the 2113 CAC patients (71% female, 7% youth ages ≤ 24 years), 94% were retained on ART after 12 months. Among CAC patients, LTFU [adjusted hazard ratio (aHR): 2.17, 95% confidence interval (CI): 1.26 to 3.73 ] and viral rebound (aHR 2.24, 95% CI: 1.00 to 5.04) were twice as likely in youth (16-24 years old) compared with older patients, but no difference in the risk of LTFU or viral rebound was observed by sex (P-values 0.613 and 0.278, respectively). CAC participation was associated with a 67% reduction in the risk of LTFU (aHR: 0.33, 95% CI: 0.27 to 0.40) compared with community health centre, and this association persisted when stratified by patient demographic and clinic characteristics. INTERPRETATION: CACs are associated with reduced risk of LTFU compared with facility-based care. Community-based models represent an important development to facilitate ART delivery and possibly improve patient outcomes.