Hazera Begum, a local activist, said that her group, Durjoy Nari Shangha, had closed drop-in centres for sex workers in the Bangladesh capital in order to win US funding.
"This feeling is like a broken heart, it's like a broken family," she said through a translator at a news conference during the 16th International Conference on Aids in Toronto.
"All of them are street workers. The only house they have is when they go to a client for a few hours. Closing a drop-in centre is like losing their homes, like losing their meeting point, losing their school, losing everything."
The centres were closed after signing what aid groups call the "prostitution loyalty oath" that requires groups receiving USAID funding to oppose prostitution and sex trafficking. The group now has only four centres, geared to children and children's rights.
A spokeswoman for George Bush's emergency plan for Aids relief said the US plan targeted at-risk populations with "specific outreach services, comprehensive prevention messages and condom information and provision" and its ambassadors had visited many projects for high-risk groups.
"Our office has not received information that drop-in centres have closed, or that there has been any interruption in services that target sex workers as a result of our anti-prostitution policy," she said.
"Critics who continue to spread misinformation about [the plan's] policies are causing fear and confusion."
Begum said that before the centres closed, the group had sold 73,000 condoms a month. That has fallen to 30,000, even though health experts agree that condoms are the best way to stop the spread of Aids.
In other countries, some organisations say that they have chosen not to accept USAID funding rather than compromise their positions, even though the locally available funding may be far smaller than the amount available through the United States.
"We are very proud of our decision," said Gabriela Leite, who works with eight local sex worker organisations in Brazil.
"It's our conviction that the sovereignty of our country should be respected."