But the research team said it will keep trying to recruit some 960 sex workers needed for the yearlong study, expected to start in June.
The study is a joint effort by Cambodia's Health Ministry, the University of California in San Francisco and Australia's University of New South Wales.
The Bill & Melinda Gates Foundation is funding the study under a program to test the tenofovir DF drug in several nations and find out if it reduces the HIV infection risk among sexually active adults regularly exposed to the virus.
The drug is already used to treat people infected with the AIDS-causing virus. The new tests are aimed at determining if the drug can prevent infection in those who don't have HIV.
But 150 Cambodian sex workers belonging to a group called Women's Network for Unity said they'd only take part if given insurance to treat possible side effects for 30 years.
"Now I'm still beautiful, and I cannot make any joke out of my future. Who will be responsible if my health falls ill after the test?" said Ly Linda, a 32-year-old prostitute.
"No, I will not join in the test," she said to applause from colleagues meeting on Monday over the insurance issue. A banner at the meeting read: "Without life insurance, please take the drug back for trial in America."
Kimberly Page Shafer, a University of California professor who attended the meeting, said the drug's side effects are not serious, and included stomach gas and nausea. Women will be provided medical care for side effects during and after the trial period, she said.
The U.S. health department says the side effects - when the drug is taken as an HIV treatment - can range from diarrhea and rashes to liver or kidney failure.
Shafer told The Associated Press after the meeting that it was impossible to provide insurance.
"There's probably no place in the world where women in clinical trial have access to coverage for life. So I have to decide if I want to work on insurance coverage or on HIV prevention," she said.
Cambodia was chosen for the study because of its high rate of HIV infections, said Khol Vohith, a researcher at the country's National Center for HIV/AIDS and Sexually Transmitted Diseases.
Cambodia has Southeast Asia's highest HIV infection rate, though it has dropped to 2.6 percent in 2002 from 3.8 percent in 1997.
Shafer said she hoped that enough women will join the study. She wouldn't say how many have already been recruited.