During the course of a tuberculosis skin testing program at a chronic care Veterans Administration Medical Center, we uncovered evidence of occult transmission of endemic tuberculosis. Skin test conversion of eight patients (one of whom had unsuspected progressive primary tuberculosis) and two employees was ultimately traced to a patient in whom tuberculosis was first diagnosed at autopsy three years earlier. Identification of employee skin test conversions was a key factor in recognizing and terminating disease transmission. Throughout the institution, 33% of patients were tuberculin-positive; 10.8% demonstrated the booster phenomenon after initial negative skin tests. Prevalence of tuberculin positivity among employees was 28%. Twelve percent of initially tuberculin-negative employees converted during employment. Our experience documents the value of tuberculin testing of both patients and staff in a chronic care environment, and the necessity of vigorous investigation of skin test conversions.