A nosocomial epidemic of multiply resistant (MR) Klebsiella pneumoniae characterized by resistance to gentamicin, tobramycin, kanamycin, cephalothin, chloramphenicol, and ampicillin occurred in a Veterans Administration hospital from 1975 to 1977. A total of 66 infected or colonized patients were observed in a 2-year period; there were 43 urinary tract infections, 13 wound or soft tissue infections, 8 pneumonias, and 6 patients with only asymptomatic stool colonization. Four patients had both pneumonia and a urinary tract infection. There were five secondary bacteremias. The majority of MR K. pneumoniae strains were type 30, but types 17, 21, and 23 and nontypable organisms were also recovered. Other gram-negative bacilli with the same antibiotic resistance pattern were isolated from 14 patients. Seven MR K. pneumoniae and three resistant Escherichia coli isolates were shown to transfer resistance to E. coli K-12. MR K. pneumoniae-infected patients were seriously ill, had long hospitalization times (mean, 67 days), and were in close geographic proximity to other cases. Compared with controls, cases more frequently had prior antibiotic treatment and urinary catheters, but not respiratory instrumentation, nasogastric tubes, or antacid treatment. The apparent source of the outbreak was traced to an index case who entered the hospital with an MR K. pneumoniae urinary tract infection. Asymptomatic gastrointestinal carriage without infection elsewhere was infrequent (1.6% of cultured patients), but 78% of patients with MR K. pneumoniae infections at other sites also had the organism in their stools. Hospital antibiotic usage was unchanged before and during the outbreak. The identification of an index case and relative lack of asymptomatic stool carriers are unique features of this plasmid-mediated MR K. pneumoniae epidemic. Although this MR K. pneumoniae outbreak appeared to be controlled by the use of isolation techniques, a simultaneous increase in gentamicin resistance among other gram-negative organisms was observed.