There is a global emergence of multidrug-resistant (MDR) strains of Klebsiella pneumoniae, a Gram-negative enteric bacterium that causes nosocomial and urinary tract infections. While the epidemiology of K. pneumoniae strains and occurrences of specific antibiotic resistance genes, such as plasmid-borne extended-spectrum β-lactamases (ESBLs), have been extensively studied, only four complete genomes of K. pneumoniae are available. To better understand the multidrug resistance factors in K. pneumoniae, we determined by pyrosequencing the nearly complete genome DNA sequences of two strains with disparate antibiotic resistance profiles, broadly drug-susceptible strain JH1 and strain 1162281, which is resistant to multiple clinically used antibiotics, including extended-spectrum β-lactams, fluoroquinolones, aminoglycosides, trimethoprim, and sulfamethoxazoles. Comparative genomic analysis of JH1, 1162281, and other published K. pneumoniae genomes revealed a core set of 3,631 conserved orthologous proteins, which were used for reconstruction of whole-genome phylogenetic trees. The close evolutionary relationship between JH1 and 1162281 relative to other K. pneumoniae strains suggests that a large component of the genetic and phenotypic diversity of clinical isolates is due to horizontal gene transfer. Using curated lists of over 400 antibiotic resistance genes, we identified all of the elements that differentiated the antibiotic profile of MDR strain 1162281 from that of susceptible strain JH1, such as the presence of additional efflux pumps, ESBLs, and multiple mechanisms of fluoroquinolone resistance. Our study adds new and significant DNA sequence data on K. pneumoniae strains and demonstrates the value of whole-genome sequencing in characterizing multidrug resistance in clinical isolates.