The clinical significance of recovery of Mycobacterium avium complex (MAC) organisms from respiratory specimens is poorly understood. One hundred sixty-one respiratory MAC isolates from 131 patients at Grady Memorial Hospital (Atlanta) and 13 MAC isolates from the hospital's hot water system were examined. Of the 131 patients, 35 (27%) had MAC disease, and 96 (73%) did not; 94 (72%) were human immunodeficiency virus infected. Ten different clusters were identified by pulsed-field gel electrophoresis. Patients without MAC disease were significantly more likely to have clustered isolates than were patients with MAC disease. Of 110 MAC isolates recovered from patients without MAC disease, 72 (65%) were part of a single large cluster that contained isolates recovered from the hospital's hot water system; 13 (25%) of 51 isolates from patients with MAC disease were also in this cluster. We conclude that acquisition of MAC from institutional water systems leads to substantial MAC disease but that most patients with MAC recovered from respiratory specimens have only transient colonization by MAC.