Objectives: To compare community- and hospital-acquired pneumonia (CAP, HAP) with respect to causative organisms, antimicrobial susceptibility, mortality and risk factors associated with high mortality. Methods: From March 1998 to December 1999, the medical charts of patients at King Abdulaziz University Hospital older than 14 years of age with a diagnosis of pneumonia were reviewed. The following data regarding the patient’s age, sex, type of pneumonia, admission to intensive care unit (ICU), type of organism isolated, antibiotic susceptibility, outcome, presence of hypotension, tachycardia, tachypnea, disturbed level of consciousness, and renal failure were recorded. Results: A total of 324 patients were studied (248 HAP, 76 CAP). Haemophilus influenzae, Moraxella catarrhalis and Streptococcus pneumoniae were the commonest isolates in CAP, while Pseudomonas spp. and Enterobacter spp. were more common in HAP. Pathogens isolated from CAP were more susceptible to ampicillin, co-amoxiclav, ciprofloxacin, cefuroxime, tetracycline and erythromycin, whereas isolates of HAP showed more sensitivity to aminoglycosides and imipenem. Mortality was higher in HAP compared to CAP: 50 versus 21%, respectively (p < 0.001). Risk factors associated with high mortality were a more advanced age, tachycardia, hypotension, a disturbed level of consciousness, renal failure and ICU admission. Conclusion: Older less expensive antibiotics can still be used in the treatment of both CAP and HAP, while the newer more expensive antibiotics should be kept in reserve to prevent the development of resistance.