A newly described species of mycobacteria, Mycobacterium celatum, has rarely been reported as a cause of localized and disseminated human disease and can easily be misidentified as Mycobacterium xenopi when identification is based on biochemical testing alone. We report two cases of pneumonia and bacteremia due to M. celatum in patients with AIDS. In one case, diagnosis and initiation of therapy were delayed by misidentification of the infecting organism as M. xenopi. Genomic analysis or high-performance liquid chromatography is necessary to distinguish the two species. The finding in our two cases and a review of existing literature indicate that pulmonary disease may be an important manifestation of infection with M. celatum, especially in patients with AIDS. Further studies are needed to determine the incidence and clinical relevance of this organism in patients with AIDS and the optimal treatment regimens.