To evaluate the efficacy of the pneumococcal vaccine in the institutionalized elderly, we designed a nonrandomized trial. We are following 998 patients institutionalized prior to the trial and 546 new admissions. In the first year, vaccinees experienced 750.9 patientyears at risk and nonvaccinees experienced 241.8 patient-years at risk. The overall rate of radiographically confirmed pneumonia was 257.6 cases per 1,000 patient-years at risk, of which approximately two-thirds were in the vaccinees and one-third in the controls. Streptococcus pneumoniae was considered the putative etiologic agent if it was the sole bacterial pathogen isolated and if gram stained respiratory secretions demonstrated >25 white blood cells and <25 squamous epithelial cells per 100× microscopic field. The rates of total cases of pneumococcal pneumonia, definite and putative pneumonia, pneumococcal bacteremia, and pneumococcal pneumonia-associated death per 1,000 patient-years at risk for vaccinees were 37.3, 4.0, and 12.0, respectively, and did not differ significantly from the rates for nonvaccinees. We estimated that the efficacy of the vaccine in reducing the rate (per 1,000 patient-years at risk) of vaccine-type pneumococcal pneumonia was 35070 for vaccinees (8.0) in relation to that in nonvaccinees (12.4). Nonvaccine pneumococcal types, including serotypes 33 (four) and 20 (one), were isolated from five of six patients with definite pneumococcal pneumonia and from 20 of 30 patients with putative pneumococcal pneumonia; the serotypes isolated from the latter group were 13 (one), 15 (two), 16 (one), 17 (two), 22 (two), 31 (two), 32 (three), and 35 (one). Vaccine-susceptible serotypes were noted in nine cases, including six cases of possible vaccine failure in vaccinees with serotypes 3 (one), 9 (two), 14 (two), and 18 (one). Although this study has methodologic limitations, the preliminary results suggest that the current pneumococcal vaccine probably will not have a major effect in reducing the number of total cases of pneumonia or pneumococcal pneumonia in this target population.