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We conducted a 4-year (1/89–12/92) retrospective cohort study among employees at a large metropolitan hospital where a nosocomial outbreak of multidrug-resistant tuberculosis (TB) had occurred. We compared the risk of tuberculin skin test (TST) conversion among employees who worked on wards where patients with culture-confirmed TB were cared for (“exposed”) with the risk among employees who worked on wards with no such patients (“unexposed”). Exposed employees had a higher 4-year risk of TST conversion (14.5%) than unexposed employees (1.4%) (adjusted relative risk 13.4; 95 percent confidence interval 5.1–35.2). Exposed employees had significantly higher risks of conversion than unexposed employees during 1989–91, but not for 1992. Among the exposed, ward clerks had a risk of conversion (15.6%) only slightly lower than nurses (18.2%). We conclude that employees who worked in areas where patients with active M. tuberculosis infection were cared for, including workers who did not provide direct patient care, had a higher risk of TST conversion than employees who did not work in these areas. Reasons for the decline in risk over time include outbreak termination, fewer admissions of patients with TB, implementation of effective infection control measures, and possible resistance to infection in some members of the study population. Am. J. Ind. Med. 32:528–534, 1997. © 1997 Wiley-Liss, Inc.