This study examines the association between scope of Quality Improvement (QI) implementation in hospitals and hospital performance on patient safety indicators. Secondary data sources included a 1997 survey of hospital QI practices, Medicare Inpatient Database, American Hospital Association's Annual Survey of Hospitals, the Bureau of Health Professions' Area Resource File, and two proprietary data sets. Using a sample of 1,784 community hospitals, the study employed two-stage instrumental variables estimation in which predicted values of four QI scope variables and control variables were used to estimate four patient safety indicators. Involvement by multiple hospital units in the QI effort is associated with worse values on all four patient safety indicators. Percentages of hospital staff and of senior managers participating in QI teams exhibited no statistically significant association with any patient safety indicator. Percentage of physicians participating in QI teams is associated with better values on two patient safety indicators.