We describe a pseudoepidemic due to atypical mycobacteria contaminating the water used by a pathology laboratory and bronchoscopy suite on two floors of the same hospital building. Inspection of laboratory procedures revealed that contamination occurred during specimen processing in pathology and while obtaining the bronchoscopic specimens. Mycobacterium gordonae, Mycobacterium avium complex, and Mycobacterium scrofulaceum were identified. During an eight-month period, a total of 22 (31%) of 70 patients with positive acid-fast smears had either an illness inconsistent with tuberculosis or a known alternate diagnosis. Control was easily obtained by insertion of a 0.2-micron polymer filter into the outflow tubing of our pathology tap water-deionizing unit and the tap water source in the bronchoscopy suite. The pseudoepidemic led to additional diagnostic-therapeutic intervention, but no patient experienced delay in appropriate diagnosis. Pseudoepidemics due to atypical mycobacteria will likely be of increased importance in institutions providing care to patients with acquired immunodeficiency syndrome.