From December 1985 to May 1986, Xanthomonas maltophilia (formerly known as Pseudomonas maltophilia) was isolated at an increased rate at our institution; 52 isolates of X. maltophilia were obtained in cultures of clinical specimens from 38 patients during that time. The records of 35 of these patients form the basis of this study. Twelve (71%) of the 17 infected and nine (50%) of the 18 colonized patients had received or were receiving antimicrobial therapy. Eleven of 17 patients (three of seven with septicemia, three of five with pneumonia, three with urinary tract infection, and two with wound infection) responded to antimicrobial therapy. Microbiologic studies of the potential environmental sources revealed growth of X. maltophilia in two water faucets and in one water sample from the medical intensive care unit. X. maltophilia is emerging as an important nosocomial pathogen in immunocompromised patients, especially those receiving broad-spectrum antimicrobial therapy.