Background. Mycobacterium tuberculosis drug resistance has challenged tuberculosis (TB) therapy and contributed to the epidemic of TB in the United States observed since 1985. Drug-resistant TB poses an important threat to the public health because of ease of transmission, as TB is an airborne infection. The national goal to eliminate TB in the United States by the year 2010 points to the need to examine the critical problem of drug-resistant TB at this time. Methods. A State TB register, plus a review of medical and laboratory records for a seven year period, was the source of information on patients with and without drug-resistant TB. The main sub-populations for study were the foreign-born, and those with previous TB treatment. These two groups have been associated with drug resistance in several prevalence surveys conducted by the Centers for Disease Control and Prevention. The patient characteristics of interest included cavitary lung disease, age, gender, country of origin, plus time since arrival in the US, and HIV status. In addition, two program characteristics, directly observed therapy (DOT) and initiation of four-drug therapy, were evaluated. Results. In a multiple logistic regression model, the odds of drug resistance in the foreign-born were 2.8 times higher; for those with a history previous TB treatment 2.6 times; and the presence of lung cavities 1.7 times. Residents of Prince George's County had a 2-fold increased odds of drug resistance compared to residents of Baltimore City; the difference persisted after the analysis was restricted to the US-born residents. Overall, drug resistance did not decline substantially over the seven year period. Among the foreign-born, the drug-resistant group developed their disease relatively earlier than the drug-sensitive group. In the period 1993-1996, an estimated 9 potential cases of multidrug-resistant TB were prevented, we believe, because of increasing use of DOT in the state. The DOT rate increased 10-fold between 1990 and 1996. Conclusion. Drug resistance is on the decline within the US-born but remains a potential danger. The increased use of DOT in Maryland most likely prevented a drug-resistant TB epidemic.