Over a 10-month period, 24 cases of Legionnaires' disease pneumonia occurred among patients admitted to an Iowa hospital, most of whom were immunosuppressed. Eleven patients died. Twenty-one patients were admitted to a recently completed hospital addition, 16 of these to a new hematology-oncology unit. Legionella pneumophila serogroup 1 was isolated from the patients, water outlets, and hot water in the new addition. Water quality variables in the hospital addition were adequate. Shock chlorination, temporary elevation of the hot water temperature, and continuous chlorination of hospital water decreased the frequency of isolation of Legionella. Water use by patients in the hematology-oncology unit was restricted until the water was free of Legionella. The incidence of Legionnaires' disease decreased. Indirect evidence supports an hypothesis of water-borne disease in this cluster of cases. Current variables of acceptable water potability may not guarantee water free of L. pneumophila.