To examine the prevalence of resistance in Streptococcus pneumoniae to key antimicrobials in Australia during 1997. Prospective, Australia-wide, laboratory-based survey. 11 microbiology laboratories from seven Australian States and Territories (five private laboratories and six public hospital laboratories) between March and November 1997. STRAINS: Up to 100 consecutive, clinically significant strains of S. pneumoniae isolated by each laboratory. Susceptibility to penicillin, amoxycillin-clavulanate, cefaclor, ceftriaxone, erythromycin, tetracycline, and sulfamethoxazole-trimethoprim (cotrimoxazole), measured by a gradient diffusion, minimum inhibitory concentration technique. Of 1020 strains, 16.8% had intermediate susceptibility to penicillin and 8.6% were resistant. Rates of resistance to other drugs were: amoxycillin-clavulanate, 3.1%; cefaclor, 21.4%; ceftriaxone, 3.1%; erythromycin, 15.6%; tetracycline, 15.7%; and cotrimoxazole, 33.4%. Non-invasive isolates harboured more resistances than invasive isolates, and resistance was more prevalent in isolates from children under two years. Multiple resistance was also common, with 21.2% of strains resistant to two or more classes of drug, and 9.3% of non-invasive and 1.7% of invasive isolates resistant to four classes. There were no obvious differences in resistance rates between private and public hospital laboratories. Rates of antimicrobial resistance are rising rapidly in S. pneumoniae in Australia. Recommendations for empiric treatment of invasive and respiratory infection need to take account of these changes.