BACKGROUND: Low-risk patients with community-acquired pneumonia are often hospitalized despite guideline recommendations for outpatient treatment. METHODS: Using data from a randomized trial conducted in 32 emergency departments, we performed a propensity-adjusted analysis to compare 30-day mortality rates, time to the return to work and to usual activities, and patient satisfaction with care between 944 outpatients and 549 inpatients in pneumonia severity index risk classes I to III who did not have evidence of arterial oxygen desaturation, or medical or psychosocial contraindications to outpatient treatment. RESULTS: After adjusting for quintile of propensity score for outpatient treatment, which eliminated all significant differences for baseline characteristics, outpatients were more likely to return to work (odds ratio [OR], 2.0; 95% confidence interval [CI], 1.5 to 2.6) or, for nonworkers, to usual activities (OR, 1.4; 95% CI, 1.1 to 1.8) than were inpatients. Satisfaction with the site-of-treatment decision (OR, 1.1; 95% CI, 0.7 to 1.8), with emergency department care (OR, 1.4; 95% CI, 0.9 to 1.9), and with overall medical care (OR, 1.1; 95% CI, 0.8 to 1.6) was not different between outpatients and inpatients. The overall mortality rate was higher for inpatients than outpatients (2.6% vs 0.1%, respectively; p < 0.01); the mortality rate was not different among the 242 outpatients and 242 inpatients matched by their propensity score (0.4% vs 0.8%, respectively; p = 0.99). CONCLUSIONS: After adjusting for the propensity of site of treatment, outpatient treatment was associated with a more rapid return to usual activities and to work, and with no increased risk of mortality. The higher observed mortality rate among all low-risk inpatients suggests that physician judgment is an important complement to objective risk stratification in the site-of-treatment decision for patients with pneumonia.