To determine the causative organisms, antimicrobial susceptibility, and outcome of community- and hospital-acquired pneumonia in diabetics and to compare this with non-diabetics, sputum cultures done at King Abdulaziz University Hospital in the period between January 1998 and December 1999 were reviewed. A total of 354 cases were studied, of which 125 (35%) were diabetics. Diabetic patients were older with a male predominance compared to non-diabetics. H. influenza was the commonest pathogen in community-acquired pneumonia (CAP) in both diabetics and non-diabetics, but there was a predominance of Staphylococcus aureus in diabetics compared to non-diabetics. Gram-negative bacilli were the commonest pathogens in hospital-acquired pneumonia (HAP) in both diabetics and non-diabetics. Ampicillin, co-amoxyclav, flouroquinolones, second-generation cephalosporins and erythromycin were used empirically in CAP while aminoglycosides, fluoroquinolones and imipenem were used in HAP in both diabetics and non-diabetics. No significant difference in mortality was found between diabetics and non-diabetics, for either CAP or HAP.