In January 2012, an inpatient in a ward of a psychiatric hospital with nearly 300 beds in Kanagawa, Japan, was diagnosed with sputum smear-positive pulmonary tuberculosis (TB). Here we characterise the TB outbreak cases and identify the population at risk. TB was diagnosed when a person tested bacteriologically positive for TB or was determined to have TB by a physician. A latent TB infection (LTBI) case was defined as a person tested positive by interferon-gamma release assay (IGRA). A total of 125 contacts were screened via IGRA and chest X-ray. In all, 15 TB and 15 LTBI cases were found by the end of October 2012, and thereafter no additional TB case was found. Of the 15 TB cases, eight were culture-positive and all the isolates had identical variable number tandem repeat patterns. Twenty-four of the 56 (42.9%, 95% confidence interval (CI) 29.7–56.8) inpatients in the ward had either TB or LTBI with a relative risk of 8.6 (95% CI 1.2–59.3), compared to the staff members who did not work full-time in the ward (one of 20 (5.0%, 95% CI 0.0–24.9)). We recommend that psychiatric hospitals conduct periodic screening of staff members and inpatients for TB to prevent nosocomial TB outbreaks.