The increase in the incidence of AIDS-related tuberculosis over the last decades has fueled the dissemination of multiple drug resistance tuberculosis (including resistant strains to INH and rifampin). This has now been recognized in a variety of settings including hospitals, prisons and shelters. We have identified a nosocomial epidemic at the Muñiz Hospital in the city of Buenos Aires, Argentina. This has evolved as one of the largest institutional outbreaks yet to be recognized. The purpose of this paper is to characterize the evolution of this outbreak which at the end of 1997 had involved in excess of 500 cases. Among the 3,322 patients discharged at the Muñiz Hospital during the years 1996-1997 with the diagnosis of tuberculosis, 440 (13.24%) were discharged with the diagnosis of multiple drug resistance tuberculosis. The immediate mortality (during the ensuing four months following the bacteriological diagnosis) was of 91.3% of cases in 1995 and decreased progressively to 65.9% in 1996 and 55.9% in 1997. The bacteriological confirmation of the diagnosis was made after the patients death in a decreasing number of cases, going from 72.5% of the cases in 1995 to 28.3% of the cases in 1997. Despite the significant progress achieved with regard to the diagnosis and treatment of multiple drug resistance tuberculosis, the measures undertaken to decrease the spread of the cases have had limited success. This is chiefly attributable to the inability to isolate cases. This has continued to promote nosocomial spread of multiple drug resistance tuberculosis in our environment.