Background: Community-acquired pneumonia (CAP) is the most common infectious cause of death in the United States. To understand the impact of efforts to improve quality and efficiency of care in CAP, we examined trends in mortality and costs among hospitalized CAP patients. Methods: Using the National Inpatient Sample from 1993–2005, we studied 569,524 CAP admissions. The primary outcome was mortality at discharge. We used logistic regression to evaluate the mortality trend, adjusting for age, gender, and comorbidities. To account for the impact of early discharge practices, we also compared daily mortality rates and performed a Cox proportional-hazards model. We used a generalized linear model to analyze trends in hospitalization costs, which were derived using cost-to-charge ratios. Results: Over time, length of stay (LOS) declined, while more patients were discharged to other facilities. The frequency of many comorbidities increased. Age/gender-adjusted mortality decreased from 8.9% to 4.1% (P