Community-acquired pneumonia (CAP) is a common illness, with the majority of patients treated out of the hospital, yet the greatest burden of the cost of care comes from inpatient management. In the past several years, the management of these patients has advanced, with new information about the natural history and prognosis of illness, the utility of serum markers to guide management, the use of appropriate clinical tools to guide the site-of-care decision, and the finding that guidelines can be developed in a way that improves patient outcome. The challenges to patient management include the emergence of new pathogens and the progression of antibiotic resistance in some of the common pathogens such as Streptococcus pneumoniae. Few new antimicrobial treatment options are available, and the utility of some new therapies has been limited by drug-related toxicity. Ancillary care for severe pneumonia with activated protein C and corticosteroids is being studied, but recently, inpatient care has been most affected by the development of evidence-based "core measures" for management that have been promoted by the Centers for Medicare and Medicaid Services, which form the basis for the public reporting of hospital performance in CAP care.