We investigated an outbreak of nosocomial pneumonia due to gentamicin, methicillin-resistant Staphylococcus aureus (GMRSA). We compared the predisposing factors for pneumonia due to GMRSA to those for pneumonia due to gentamicin, methicillin-sensitive Staphylococcus aureus (GMSSA). Seventeen of 29 patients with staphylococcal pneumonia were infected with GMRSA. Risk factors and associated diseases which selected for infection with GMRSA as opposed to GMSSA included prior antibiotic therapy for a prolonged period of time (p = 0.0001), number of risk factors per patient (p = 0.0001), days hospitalized prior to diagnosis of pneumonia (p = 0.002) and number of associated diseases per patient (p = 0.002). Despite the epidemiologic differences between GMSSA and GMRSA pneumonia, there were no differences in the clinical presentation, course of illness, complications, response to appropriate therapy or outcome between the two groups. Survival was adversely affected by age only among the GMSSA patients (p = 0.02) and by the number of associated diseases (p = 0.005).