Monochloramine disinfection of municipal water supplies is associated with decreased risk for Legionnaires' disease. We conducted a 2-year, prospective, environmental study to evaluate whether converting from chlorine to monochloramine for water disinfection would decrease Legionella colonization of hot water systems. Water and biofilm samples from 53 buildings were collected for Legionella culture during 6 intervals. Prevalence ratios (PRs) comparing Legionella colonization before and after monochloramine disinfection were adjusted for water system characteristics. Legionella colonized 60% of the hot water systems before monochloramine versus 4% after conversion (PR 0.07, 95% confidence interval 0.03-0.16). The median number of colonized sites per building decreased with monochloramine disinfection. Increased prevalence of Legionella colonization was associated with water heater temperatures <50 degrees C, buildings taller than 10 stories, and interruptions in water service. Increasing use of monochloramine in water supplies throughout the United States may reduce Legionella transmission and incidence of Legionnaires' disease.