An outbreak of Legionella pneumophila pneumonia occurred in 6 of 49 new renal transplant recipients over the course of 13 months. We compared infected patients (cases) and uninfected patients (controls) with respect to potential risk factors. Corticosteroid use, need for hemodialysis and number of days of hemodialysis were significantly greater among the cases. Logistic regression analysis identified corticosteroid dosage and number of days of hemodialysis as independent risk factors. Lymphopenia and monocytopenia were correlated with the amount of corticosteroid administered and occurred to a greater degree in the cases. All clinical isolates were of L. pneumophila serogroup 1, subtype Philadelphia 1, which was also cultured from a recovery room sink outside the operating room where the transplants were done. Other areas of the hospital were colonized with other, heterogeneous strains of L. pneumophila. The organism was not eliminated from the hospital water supply despite shock chlorination and superheating of water tanks. The epidemic ended when new transplant recipients routinely received prophylactic trimethoprim-sulfamethoxazole (160-800 mg given orally once daily) while in hospital after transplantation. Corticosteroid-induced monocytopenia and lymphopenia and the complement activation and monocyte depletion effects of hemodialysis may combine to increase susceptibility to Legionnaires' disease.