This study of ventilated patients investigated current clinical practice in 476 episodes of pneumonia (48% community-acquired pneumonia, 24% hospital-acquired pneumonia, 28% ventilator-associated pneumonia) using a prospective survey in 14 intensive care units (ICUs) within Australia and New Zealand. Diagnostic methods and confidence, disease severity, microbiology and antibiotic use were assessed. All pneumonia types had similar mortality (community-acquired pneumonia 33%, hospital-acquired pneumonia 37% and ventilator-associated pneumonia 24%, P=0.15) with no inter-hospital differences (P=0.08-0.91). Bronchoscopy was performed in 26%, its use predicted by admission hospital (one tertiary: OR 9.98, CI 95% 5.11-19.49, P< 0.001; one regional: OR 6.29, CI 95% 3.24-12.20, P<0.001), clinical signs of consolidation (OR 3.72, CI 95% 2.09-6.62, P<0.001) and diagnostic confidence (OR 2.19, CI 95% 1.29-3.72, P=0.004). Bronchoscopy did not predict outcome (P=0.11) or appropriate antibiotic selection (P=0.69). Inappropriate antibiotic prescription was similar for all pneumonia types (11-13%, P=0.12) and hospitals (0-16%, P=0.25). Blood cultures were taken in 51% of cases. For community-acquired pneumonia, 70% received a third generation cephalosporin and 65% a macrolide. Third generation cephalosporins were less frequently used for mild infections (OR 0.38, CI 95% 0.16-0.90, P=0.03), hospital-acquired pneumonia (OR 0.40, CI 95% 0.23-0.72, P<0.01), ventilator-associated pneumonia (OR 0.04, CI 95% 0.02-0.13, P<0.001), suspected aspiration (OR 0.20, CI 95% 0.04-0.92, P=0.04), in one regional (OR 0.26, CI95% 0.07-0.97, P=0.05) and one tertiary hospital (OR 0.14, CI 95% 0.03-0. 73, P=0.02) but were more commonly used in older patients (OR 1.02, CI 95% 1.01-1.03, P=0.01). There is practice variability in bronchoscopy and antibiotic use for pneumonia in Australian and New Zealand ICUs without significant impact on patient outcome, as the prevalence of inappropriate antibiotic prescription is low. There are opportunities for improving microbiological diagnostic work-up for isolation of aetiological pathogens.