(FORTUNE Magazine) - In Bethlehem, PA., on the very lot where Bethlehem Steel workers once shaped molten metal, a small team of mostly middle-aged women, dressed in lab coats and hairnets, now assembles a slender, five-inch swab.

This modest piece of plastic is the key component in OraSure Technologies (Research)' oral HIV test kit. The Nasdaq-listed company already sells the kit to hospitals and public health clinics. Now it is undergoing FDA review to market it directly to consumers for use at home.

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OraSure's chief executive, Doug Michels, thinks his product, like the beams and girders that once rolled off this former steelyard, could also become a pillar of sorts - in the fight against AIDS.

This June marks a grim anniversary: 25 years since the first AIDS diagnosis. More than one million Americans are living with HIV/AIDS. A quarter do not know it, and unknowing carriers are responsible for half of America's 40,000 new HIV cases each year. Michels believes that the OraQuick Advance Rapid HIV Antibody Test can reduce that toll.

The FDA has authorized only two HIV kits for home use. Johnson & Johnson (Research) offered a home blood test but dropped it after sales failed to live up to expectations. The other, by privately held Home Access Health Corp., costs $44 and requires consumers to prick a finger and blot blood on a number-coded card. They send the card via Federal Express to a Home Access lab. Two days later they call a toll-free number, punch in a code, and hear the result. (They have the option of being connected to counselors.) The Home Access test has never sold more than 150,000 units per year.

OraSure's kit, similar in concept to a home pregnancy test, is simpler and quicker and doesn't involve blood. Users swipe their gums with a swab, saturating it with saliva. They then insert the swab into a small tube-shaped bottle of fluid and wait 20 minutes. The result appears in a transparent window: one horizontal red bar for negative, two bars if the user is HIV positive.

"This test is a tool," Michels says. "I want to put it in the hands of consumers and empower them to make good decisions."

He will have to wait awhile. In March 2004, the FDA approved the kit for use in public health clinics and hospitals, which pay $17 for each exam. But the agency is treading cautiously on allowing it to be released to the public.

Its main fear is that some consumers, taking the test without oversight from a doctor or nurse, might commit suicide after testing positive. Regulators are also nervous that consumers might not use the test correctly.

The task for OraSure is to convince the feds - with reams of market test data - that it has addressed these concerns. One recent setback: Last December, when clinics in 35 cities were testing the kit, 1 percent of the tests returned false positives - indicating the users had HIV when they did not - in Los Angeles, New York, and San Francisco. The FDA concluded that the errors were the result of the nurses' failure to follow directions - just the kind of thing it worries about.

Doug Michels and his regulatory team met with FDA officials in early May for the fourth time in a year. The agency wants to hear from Michels about the company's design for on-the-ground testing to begin this summer.

It is likely to require that OraSure observe consumers and determine what kind of written directions offer the best guidance, especially for less educated users or those for whom English is a second language. OraSure also needs to show the agency that it has a follow-up strategy, such as counseling and referrals, for those who test positive. In all, OraSure will probably need another 18 months, analysts predict, before the FDA will allow it to enter the consumer market.

Even with all the regulatory hurdles that OraSure has yet to traverse, the environment is promising for a product like OraQuick. In President Bush's last State of the Union address, he proposed more than $90 million specifically for purchase and distribution of rapid HIV tests, and the Centers for Disease Control recently recommended that HIV testing be part of routine physicals.

The move could benefit OraSure's current hospital and clinic HIV products; the ramifications for home testing are still uncertain. What is clear, however, is that with proven treatments available for HIV/AIDS, federal policy is more supportive of testing than ever before.

That is a massive shift in direction. In the 1990s, the FDA thwarted several efforts to market home HIV tests. Now the CDC says that once a home test makes it to market, it will support it with a public awareness campaign.

"The old strategy wasn't working," admits Bernard Branson, the CDC's associate director for lab diagnostics in the division of HIV and AIDS prevention. "Now we want people to know their status, so HIV-positive people can reduce transmission."

At an FDA advisory panel meeting in March, a majority of independent experts and FDA panelists agreed on a clear regulatory pathway for home HIV tests. The FDA does not reveal its thinking about procedures under review, but panelists indicated they were inclined to approve OraQuick if the field tests were successful.

A broad collection of interest groups and activists also appear to favor OraSure's efforts to sell a mass-market HIV test. At the FDA meeting in March, activists representing the National Association of Evangelicals, as well as African-American, Latino, and college-age people with HIV, took the podium to show support for OraQuick.

Says Philip Hilton, senior vice president of the National Black Leadership Commission on AIDS, "People are unwittingly passing on the virus. OraQuick gives people options for knowing their status."

An over-the-counter approval would be a boon for OraSure. Right now it is the only company with a home-based oral test ready to roll. Though other firms are likely to follow suit, it is years ahead of the competition. OraSure (2005 revenues: $69.4 million) has carved out specialties in oral drug and alcohol tests and cryosurgery treatments like Compound W Freeze Wart Off. Considering that 60 million HIV tests were administered in the U.S. last year, approval for OraQuick could lift the company into a different league.

"Think about it this way," says Needham medical technology analyst Ed Shenkan. "The potential consumer for this test is any American who's sexually active."

The drawn-out approval process may be wearisome, but it does give OraSure some breathing space. What packaging will work? How should it advertise? Does OraSure have a clue how to speak to a scared 21-year-old gay kid?

"Probably not," admits Michels, who says he is soliciting help from a number of large consumer health-care companies.

Despite the difficulties, Michel's vision is an expansive one. He is already talking to several foreign regulators about selling OraQuick in Europe and Africa. But before he can help to save the world, he has to master the paperwork back home.

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