To determine the prevalence, risk factors and clinical outcomes of penicillin-resistant S. pneumoniae (PRSP) in community-acquired pneumonia (CAP), a cross-sectional study was conducted between January 1995 and December 2004 at Srinagarind Hospital, Khon Kaen, Thailand. Patients hospitalized with CAP and culture proved to be S. pneumoniae were included. PRSP was found in 22 of 64 (34.4%) patients. The MIC levels of penicillin non-susceptible strains ranged between 0.25 and 0.75 microg/ml. Resistance to other antibiotics ranked: cotrimoxazole (51.6%), tetracycline (26.6%), erythromycin (20.6%), lincomycin (18.7%), chloramphenicol (12.5%) and ampicillin (1.6%). None of the isolates was resistant to cephalothin. The significant risk factors for PRSP infection were previous antibiotic use within 3 months (Adjusted OR 40.83, 95% CI 3.71 to 449.41) and alcoholism (Adjusted OR 8.82, 95% 1.25 to 62.46). Bacteremia and empyema thoracis were found more commonly in PRSP than PSSP infection, but not statistically significant. Pneumonia-related mortality was nearly the same, PRSP 9.1% vs PSSP 9.5% (p = 0.96). The reason why the clinical outcomes of these two groups were not different may be the patients were infected with mildly resistant organisms. Thus, pneumonia caused by intermediate-level penicillin resistant S. pneumoniae appears to be adequately treated with beta-lactams or aminopenicillin antibiotics. The MIC levels of penicillin resistance should be monitored further. The need for antibiotics active against drug-resistant S. pneumoniae was required if high-level penicillin resistance was detected.