Multidrug-resistant strains of Streptococcus pneumoniae were isolated over a two-year period (July 1995 until August 1997) from the sputum of 36 patients who were hospitalized in a Dutch medical centre. Nosocomial transmission was confirmed by typing of the bacterial isolates: all 36 multidrug-resistant isolates shared the same genotype, serotype, and displayed overlapping drug resistance profiles. Thirty-two of the 36 (89%) patients had chronic obstructive pulmonary disease (COPD). The outbreak was initiated by a 76-year old patient, who had been colonized with the same strain since 1993. Because staff screening of the hospital and pulmonary function department was negative, patient-to-patient spread was the most likely cause of this outbreak. The epidemic ceased following the commencement of barrier nursing, a treatment course of ceftriaxone, and a five-day rifampicin eradication therapy for the positive patients. The outbreak resulted from failure to recognize quickly the rapid transmission of this multidrug-resistant pneumococcal clone. We conclude that patients with COPD are at high risk of acquiring multidrug resistant pneumococci, and suggest that COPD patients who are colonized or infected with multidrug-resistant pneumococci should be isolated to prevent future transmission.