The incidence of nosocomial pneumonia involving multi-drug resistant Staphylococcus aureus strains (MRSA) in particular is on the rise worldwide. For years, vancomycin has been used as the drug of choice in the treatment of MRSA infections and was recommended as such by clinical guidelines. Inadequate drug levels in pulmonary compartments due to large molecular size may be the cause of the comparatively low survival rates of patients with MRSA pneumonia treated with vancomycin, despite in vitro susceptibility of the bacterial isolates. Several trials demonstrated the clinical effectiveness of the novel oxazolidinone linezolid in nosocomial MRSA pneumonia. Linezolid achieves higher pulmonary concentrations than vancomycin which may be the cause of superior survival rates observed with linezolid in nosocomial MRSA pneumonia. Staphylococcus aureus strains with reduced susceptibility to vancomycin (VISA) are encountered with increasing frequency and may contribute to clinical failures of vancomycin. To date, linezolid-resistance appears to be rare and predominantly affects Enterococci, while very few linezolid-resistant S. aureus isolates were reported. Reduced susceptibility to linezolid is caused by point mutations in the 23S ribosomal RNA genes, which may be selected for by long-term therapy. The future development of linezolid resistance is hard to predict since the drug has been in use only for a limited period of time. This article describes the drug profile, patents and current data on the clinical efficacy of linezolid and reviews its role in treatment of MRSA pneumonia.