In a molecular, microbiologic, and case-control study to describe the epidemiology of ceftazidime-resistant Klebsiella pneumoniae and Escherichia coli bloodstream infection, 32 unique isolates were recovered over 31 months from the blood of patients hospitalized in a 900-bed hospital in Chicago. Multivariate analysis revealed cases occurred more frequently in debilitated nursing home patients with central venous catheters than in younger, healthier patients. Mortality rates were similar for cases and controls. Case-patients were less likely to die if they received appropriate antibiotic treatment within 3 days of bacteremia onset (P = .02). Pulsed-field gel electrophoresis analysis indicated a polyclonal outbreak, with strain-specific temporal and geographic clustering. Isoelectric focusing results suggested that a predominant enzyme, TEM-10, was responsible for the ceftazidime resistance. The resistance gene was usually carried on a large conjugative plasmid. The polyclonality of the resistant strains suggests that ceftazidime resistance due to TEM-10 is now endemic in Chicago.