This study reviews evidence on whether services in United States hospitals vary by racial groupings of patients. The focus is on both equity and quality of hospital services. Patients with the diagnosis of pneumonia were studied at 16 randomly selected hospitals. The services and outcomes studied include five measures of the intensity of diagnostic and therapeutic services received by patients, and death rates during hospitalization. Multiple regression was used to control for patient health status at the time of entry into the hospital. Results are presented both before and after controlling for the effects of differences in the services offered between hospitals and patient payment sources. Our findings suggest that nonwhite pneumonia patients received fewer hospital services than expected on the basis of their health characteristics, and that their hospital lengths of stay were longer than expected. These findings were apparent when the hospitals were examined in aggregate and within individual institutions. No consistent differences in death rates were apparent. Possible explanations for these results are discussed. From our data, we conclude that patient race remains a potentially significant characteristic in determining the intensity of care provided to patients in hospitals, which is not explained by differences among racial groups in health status, source of payment, or site of hospitalization.