Fifty clinical isolates of Klebsiella pneumoniae and Escherichia coli with reduced susceptibility to third-generation cephalosporins, collected from 11 hospitals in Thailand, were studied. All isolates were found to produce extended-spectrum beta-lactamase (ESBL), as judged by double-disk synergy and combination disk methods. Most ESBL-producing K. pneumoniae isolates were resistant to ceftazidime (94%) and aztreonam (90%). In contrast, most ESBL-producing E. coli isolates were resistant to ceftriaxone (95%) and cefotaxime (74%). Plasmid DNA was isolated and beta-lactamase genes were identified by PCR and sequencing. We found that SHV-12 and CTX-M-14 were the main ESBLs responsible for resistance in K. pneumoniae and E. coli, respectively. SHV-27, SHV-28, and CTX-M-14 were detected in three, two, and four K. pneumoniae isolates, respectively. A high genetic diversity among ESBL-producing K. pneumoniae and E. coli isolates was observed. In addition, the finding of a few isolates that produced identical restriction patterns on pulsed field gel electrophoresis (PFGE) suggests the clonal spread of resistant bacteria within the hospital.