BACKGROUND: Streptococcus pneumoniae is the chief cause of pneumonia in older adults, but it remains unclear whether use of the pneumococcal polysaccharide vaccine alters the overall risk of community-acquired pneumonia. In a large population of older adults, we assessed the effectiveness of the pneumococcal vaccine. METHODS: In this retrospective cohort study, 47,365 Group Health Cooperative members 65 years of age or older were assessed over a three-year period. The primary outcomes were hospitalization because of community-acquired pneumonia (validated by chart review), pneumonia in patients who were not hospitalized (``outpatient pneumonia,'' determined from administrative data sources), and pneumococcal bacteremia. The association between pneumococcal vaccination and the risk of each outcome was evaluated by means of multivariate Cox proportional-hazards models, with adjustment for age, sex, nursing-home residence or nonresidence, smoking status, medical conditions, and receipt or nonreceipt of influenza vaccine. RESULTS: During the study period, 1428 cohort members were hospitalized with community-acquired pneumonia, 3061 were assigned a diagnosis of outpatient pneumonia, and 61 had pneumococcal bacteremia. Receipt of the pneumococcal vaccine was associated with a significant reduction in the risk of pneumococcal bacteremia (hazard ratio, 0.56; 95 percent confidence interval, 0.33 to 0.93) but a slightly increased risk of hospitalization for pneumonia (hazard ratio, 1.14; 95 percent confidence interval, 1.02 to 1.28). Pneumococcal vaccination did not alter the risk of outpatient pneumonia (hazard ratio, 1.04; 95 percent confidence interval, 0.96 to 1.13) or of any case of community-acquired pneumonia, whether or not it required hospitalization (hazard ratio, 1.07; 95 percent confidence interval, 0.99 to 1.14). CONCLUSIONS: These findings support the effectiveness of the pneumococcal polysaccharide vaccine for the prevention of bacteremia, but they suggest that alternative strategies are needed to prevent nonbacteremic pneumonia, which is a more common manifestation of pneumococcal infection in elderly persons.