A nosocomial outbreak of pneumonia caused by Legionella pneumophila serogroup 3 occurred in four patients following hematopoietic stem cell transplantation (HSCT) in a new bone marrow transplantation (BMT) unit during a 2 week period. The causative organism was recovered from the water supply system to the same unit just before the outbreak. Nineteen other BMT patients were hospitalized in the same unit at the same time, giving a frequency of proven infection of 4/23 = 17%. Immediately after recognition of the outbreak, use of tap water was forbidden, humidifiers were disconnected, and ciprofloxacin prophylaxis was started for all patients in the unit, until decontamination of the water was achieved. No other cases were detected. In conclusion, contamination of the hospital water supply system with legionella carries a high risk for legionella pneumonia among BMT patients. Early recognition of the outbreak, immediate restrictions of water use, antibiotic prophylaxis for all non-infected patients, and water decontamination, successfully terminated the outbreak.