Introduction: Inhalation injury is a particularly lethal form of thermal burn injury, and is associated with increased morbidity and mortality. Pneumonia is a common complication of inhalation injury, due to the increased susceptibility of lungs that have been stripped of their biologic defense mechanisms, as well as the general susceptibility of the burn population to infections. While older series suggest that pneumonia is associated with worse mortality and morbidity, recent reports suggest that this may not be the case in all populations. Methods: We attempted to clarify the impact of pneumonia in terms of mortality, length of mechanical ventilation, need for tracheostomy, and discharge disposition, in patients admitted with inhalation injury by performing a retrospective review of patients admitted to a regional burn center 2002-2009. Burn registry and electronic chart review were used to obtain demographic, clinical and outcome data. Univariate and multivariate analysis was used to compare outcomes in patients who developed pneumonia versus those who did not. Results: The study cohort comprised 166 patients, of whom 21 (13%) were diagnosed with pneumonia. Development of pneumonia was not predicted by age, surface area burned or other complications such as acute respiratory distress syndrome. Surprisingly, pneumonia was associated with reduced inpatient mortality (p = 0.006). However, patients who developed pneumonia were also more likely to have prolonged ventilator dependence (19 vs 5 days, p < 0.001), require intensive respiratory therapy (p < 0.001), receive tracheostomy (p < 0.001) and have an increased overall length of stay (33 vs. 10 days, p < 0.001). They were significantly less likely to be discharged home and more likely to be transferred to a nursing facility or rehabilitation center upon discharge (p = 0.002).