Risk factors for the acquisition of penicillin-resistant pneumococci (PRP) were analyzed at a university hospital in New York City. Patients with PRP and control patients with penicillin-sensitive pneumococcal infections were compared. In 1994, 24 (21%) of 113 patients with Streptococcus pneumoniae infections had PRP; 13 PRP isolates were from children and 11 from adults. Only white race (P < .05) and residence in a pediatric chronic care facility (P < .05) were significantly associated with penicillin resistance. An investigation at one chronic care facility revealed that 33% of children (17/52) had PRP colonization. Fourteen of the 17 PRP isolates were also resistant to ceftriaxone. Prior antibiotic use and specifically beta-lactam use were associated with penicillin resistance. All typeable PRP isolates were multidrug-resistant serotype 23. Pediatric residents in chronic care facilities may be an important reservoir of PRP and may serve as a source of PRP transmission when they are transferred to acute care hospitals.