We describe the epidemiology and control of a hospital outbreak of multi-drug-resistant tuberculosis (MDR-TB). A human immunodeficiency virus (HIV)-negative patient with drug-sensitive tuberculosis developed MDR-TB during a period of unsupervised therapy. She was admitted to an isolation room in a ward with HIV-positive patients, but the room, unbeknown to hospital staff, was at positive-pressure relative to the main ward. Seven HIV-positive contacts developed MDR-TB. The diagnosis in the second patient was delayed, partly because acid-fast bacilli in his sputum were assumed to be Mycobacterium avium-intracellulare. All the available Mycobacterium tuberculosis isolates were indistinguishable by molecular typing. Nearly 1400 staff and patient contacts were offered screening, but the screening programme detected only one of the cases. Despite therapy, the index patient and two of the contacts died. HIV-positive patients are more likely than others to develop tuberculosis after exposure, and the disease may progress more rapidly. In these patients the possibility that acid-fast bacilli may represent M. tuberculosis must always be considered. Patients with tuberculosis (suspected or proven) should not be nursed in the same wards as immunosuppressed patients, and should be isolated. MDR-TB cases must be isolated in negative-pressure rooms. Hospital side-rooms may be positive-pressure as a fire safety measure; infection control teams must be aware of the airflows in all isolation rooms, and must be consulted during the design of hospital buildings. Good communication between infection control teams and clinicians is important, and all medical and nursing staff must be aware of the principles of management of patients with proven or suspected tuberculosis and MDR-TB.