The Oklahoma Foundation for Medical Quality initiated a cooperative project to evaluate the management of community-acquired pneumonia in Oklahoma Medicare beneficiaries. We reviewed the medical records of 767 patients discharged with a principal diagnosis of pneumonia during fiscal year 1993 from 20 hospitals. Of the 757 cases that met criteria for analysis, 92 (12%) died during hospitalization. There were significant differences between patients who survived and those who died with respect to patient age, admission source, and absence of indicators of severe pneumonia. Deviations from the American Thoracic Society guidelines for the treatment of community-acquired pneumonia were demonstrated with regards to the collection of routine sputum gram stains and cultures, blood cultures, and thoracentesis. We also demonstrated variations between hospitals in the timing of the first dose of antibiotic administered after admission of the patient. Based on this project, there appear to be opportunities for improvement in the care provided to patients admitted to the hospital with pneumonia.