Nosocomial pneumonia is the leading cause of mortality due to hospital-acquired infections. A thorough understanding of the most recent developments in evaluating and managing nosocomial pneumonia is critical for infection control professionals and hospital epidemiologists, given the incidence and cost of this important patient safety problem. We review the evidence on pathogenesis, diagnosis, treatment, and prevention of both ventilator-associated and nonventilator-associated pneumonia. Key recommendations are then provided for diagnostic testing strategies, antibiotic selection, and treatment duration. We also summarize the most recent data on how to prevent hospital-acquired infection, in general, and nosocomial pneumonia, in particular.