Case records of 48 foals with pneumonia due to Rhodococcus equi were reviewed. Twenty of the 48 foals survived and 28 died or were euthanized. There was no significant difference between the survivors and non-survivors in the age of onset of illness, duration of illness prior to admission, the mean white blood cell (WBC) count, or the mean plasma fibrinogen content. All foals had R. equi isolated from a tracheobronchial aspirate or lung specimens obtained at necropsy. All organisms were susceptible in vitro (Kirby-Bauer) to erythromycin and gentamicin. Susceptibilities to other drugs were: trimethoprim-sulfamethoxazole (88%), tetracycline (87%), chloramphenicol (83%); 97% were resistant to cephalothin and 83% to penicillin. Thirteen of the 20 surviving foals were treated with erythromycin and/or rifampin. A decline in mortality rate was observed with the introduction of the combination of erythromycin and rifampin. None of the 17 foals treated with penicillin and gentamicin survived. Chronic, active, non-septic synovitis was confirmed in 17 foals. These foals had joint distension with mild or no apparent lameness.