We set out to determine tuberculosis incidence and risk factors in the homeless population in San Francisco. We also examined the transmission of tuberculosis by molecular methods. We followed a cohort of 2,774 of the homeless first seen between 1990 and 1994. There were 25 incident cases during the period 1992 to 1996, or 270 per 100,000 per year (350/100,000 in African Americans, 450/100,000 in other nonwhites, 60/100,000 in whites). Ten cases were persons with seropositive HIV. Independent risk factors for tuberculosis were HIV infection, African American or other nonwhite ethnicity, positive tuberculin skin test (TST) results, age, and education; 60% of the cases had clustered patterns of restriction fragment length polymorphism, thought to represent recent transmission of infection with rapid progression to disease. Seventy-seven percent of African-American cases were clustered, and 88% of HIV-seropositive cases. The high rate of tuberculosis in the homeless was due to recent transmission in those HIV-positive and nonwhite. African Americans and other nonwhites may be at high risk for infection or rapid progression. Control measures in the homeless should include directly observed therapy and incentive approaches, treatment of latent tuberculous infection in those HIV-seropositive, and screening in hotels and shelters.