In hospitalised patients who develop respiratory symptoms and fever, one should consider the diagnosis. The likelihood increases when upon investigation symptoms are found of respiratory insufficiency, purulent secretions, newly developed infiltrate on the chest X-Ray, and increasing leucocyte count. If pneumonia is suspected material from sputum or tracheal aspirates are sent to the microbiology department for cultures. In case of pleural effusion thoracentesis is performed for examination of pleural fluid. In suspected ventilator-associated pneumonia it has been suggested that bronchoscopy(BAL) is necessary because of the known risks surrounding clinical diagnoses.

Patients with symptoms of CAP require evaluation. Diagnosis of pneumonia is made clinically, rather than on the basis of a particular test. Evaluation begins with a physical examination by a health provider, which may reveal fever, an increased respiratory rate (tachypnea), low blood pressure (hypotension), a fast heart rate (tachycardia) and changes in the amount of oxygen in the blood. Palpating the chest as it expands and tapping the chest wall (percussion) to identify dull, non-resonant areas can identify stiffness and fluid, signs of CAP. Listening to the lungs with a stethoscope (auscultation) can also reveal signs associated with CAP. A lack of normal breath sounds or the presence of crackles can indicate fluid consolidation. Increased vibration of the chest when speaking, known as tactile fremitus, and increased volume of whispered speech during auscultation can also indicate fluid.

When signs of pneumonia are discovered during evaluation, chest X-rays, are performed to support a diagnosis of CAP, and examination of the blood and sputum for infectious microorganisms and blood tests may be used to support a diagnosis of CAP. Diagnostic tools depend on the severity of illness, local practices and concern about complications of the infection. All patients with CAP should have their blood oxygen monitored with pulse oximetry. In some cases, arterial blood gas analysis may be required to determine the amount of oxygen in the blood. A complete blood count (CBC) may reveal extra white blood cells, indicating infection.

Chest X-rays and X-ray computed tomography (CT) can reveal areas of opacity (seen as white), indicating consolidation. CAP does not always appear on x-rays, because the disease is in its initial stages or involves a part of the lung an x-ray does not see well. In some cases, chest CT can reveal pneumonia not seen on x-rays. However, congestive heart failure or other types of lung damage can mimic CAP on x-rays.

Several tests can identify the cause of CAP. Blood cultures can isolate bacteria or fungi in the bloodstream. Sputum Gram staining and culture can also reveal the causative microorganism. In severe cases, bronchoscopy can collect fluid for culture. Special tests can be performed if an uncommon microorganism is suspected, such as urinalysis for Legionella antigen in Legionnaires' disease.

In terms of the diagnosis of Klebsiella pneumonia the following can be done to determine if the individual has this infection, including "susceptibility testing" for (ESBL) "Extended Spectrum β-Lactamase", as well as:

- CBC

- Sputum(culture]

- Radiography(chest)

- CT scan

Several diseases can present with similar signs and symptoms to pneumonia, such as: chronic obstructive pulmonary disease (COPD), asthma, pulmonary edema, bronchiectasis, lung cancer, and pulmonary emboli. Unlike pneumonia, asthma and COPD typically present with wheezing, pulmonary edema presents with an abnormal electrocardiogram, cancer and bronchiectasis present with a cough of longer duration, and pulmonary emboli presents with acute onset sharp chest pain and shortness of breath.

Some CAP patients require intensive care, with clinical prediction rules such as the pneumonia severity index and CURB-65 guiding the decision to hospitalize. Factors increasing the need for hospitalization include:

- Age greater than 65

- Underlying chronic illnesses

- Respiratory rate greater than 30 per minute

- Systolic blood pressure less than 90 mmHg

- Heart rate greater than 125 per minute

- Temperature below 35 or over 40 °C

- Confusion

- Evidence of infection outside the lung

Laboratory results indicating hospitalization include:

- Arterial oxygen tension less than 60 mm Hg

- Carbon dioxide over 50 mmHg or pH under 7.35 while breathing room air

- Hematocrit under 30 percent

- Creatinine over 1.2 mg/dl or blood urea nitrogen over 20 mg/dl

- White-blood-cell count under 4 × 10^9/L or over 30 × 10^9/L

- Neutrophil count under 1 x 10^9/L

X-ray findings indicating hospitalization include:

- Involvement of more than one lobe of the lung

- Presence of a cavity

- Pleural effusion

Ventilator-associated pneumonia occurs in people breathing with the help of mechanical ventilation (specifically, it is pneumonia that arises more than 48 to 72 hours after endotracheal intubation). Like any medical device, ventilators involve some risk of infection because of how difficult it is to prevent bacteria from colonizing the internal parts and surfaces, even with diligent cleaning. People who need ventilators typically are rather ill, to begin with, so a superimposed pneumonia is not always easily managed. Immunodeficiency may be involved because of poor nutritional status and whichever disorders are comorbid.

Patients with HCAP are more likely than those with community-acquired pneumonia to receive inappropriate antibiotics that do not target the bacteria causing their disease.

In 2002, an expert panel made recommendations about the evaluation and treatment of probable nursing home-acquired pneumonia. They defined probably pneumonia, emphasized expedite antibiotic treatment (which is known to improve survival) and drafted criteria for the hospitalization of willing patients.

For initial treatment in the nursing home, a fluoroquinolone antibiotic suitable for respiratory infections (moxifloxacin, for example), or amoxicillin with clavulanic acid plus a macrolide has been suggested. In a hospital setting, injected (parenteral) fluoroquinolones or a second- or third-generation cephalosporin plus a macrolide could be used. Other factors that need to be taken into account are recent antibiotic therapy (because of possible resistance caused by recent exposure), known carrier state or risk factors for resistant organisms (for example, known carrier of MRSA or presence of bronchiectasis predisposing to Pseudomonas aeruginosa), or suspicion of possible Legionella pneumophila infection (legionnaires disease).

In 2005, the American Thoracic Society and Infectious Diseases Society of America have published guidelines suggesting antibiotics specifically for HCAP. The guidelines recommend combination therapy with an agent from each of the following groups to cover for both "Pseudomonas aeruginosa" and MRSA. This is based on studies using sputum samples and intensive care patients, in whom these bacteria were commonly found.

- cefepime, ceftazidime, imipenem, meropenem or piperacillin–tazobactam; plus

- ciprofloxacin, levofloxacin, amikacin, gentamicin, or tobramycin; plus

- linezolid or vancomycin

In one observational study, empirical antibiotic treatment that was not according to international treatment guidelines was an independent predictor of worse outcome among HCAP patients.

Guidelines from Canada suggest that HCAP can be treated like community-acquired pneumonia with antibiotics targeting Streptococcus pneumoniae, based on studies using blood cultures in different settings which have not found high rates of MRSA or Pseudomonas.

Besides prompt antibiotic treatment, supportive measure for organ failure (such as cardiac decompensation) are also important. Another consideration goes to hospital referral; although more severe pneumonia requires admission to an acute care facility, this also predisposes to hazards of hospitalization such as delirium, urinary incontinence, depression, falls, restraint use, functional decline, adverse drug effects and hospital infections. Therefore, mild pneumonia might be better dealt with inside the long term care facility. In patients with a limited life expectancy (for example, those with advanced dementia), end-of-life pneumonia also requires recognition and appropriate, palliative care.

The diagnosis can be confirmed by the characteristic appearance of the chest x-ray, which shows widespread pulmonary infiltrates, and an arterial oxygen level (PaO) that is strikingly lower than would be expected from symptoms. Gallium 67 scans are also useful in the diagnosis. They are abnormal in approximately 90% of cases and are often positive before the chest x-ray becomes abnormal. The diagnosis can be definitively confirmed by histological identification of the causative organism in sputum or bronchio-alveolar lavage (lung rinse). Staining with toluidine blue, silver stain, periodic-acid schiff stain, or an immunofluorescence assay will show the characteristic cysts. The cysts resemble crushed ping-pong balls and are present in aggregates of 2 to 8 (and not to be confused with "Histoplasma" or "Cryptococcus", which typically do not form aggregates of spores or cells). A lung biopsy would show thickened alveolar septa with fluffy eosinophilic exudate in the alveoli. Both the thickened septa and the fluffy exudate contribute to dysfunctional diffusion capacity which is characteristic of this pneumonia.

"Pneumocystis" infection can also be diagnosed by immunofluorescent or histochemical staining of the specimen, and more recently by molecular analysis of polymerase chain reaction products comparing DNA samples. Notably, simple molecular detection of "Pneumocystis jirovecii" in lung fluids does not mean that a person has "Pneumocystis" pneumonia or infection by HIV. The fungus appears to be present in healthy individuals in the general population.

Chest radiographs (X-ray photographs) often show a pulmonary infection before physical signs of atypical pneumonia are observable at all.

This is occult pneumonia. In general, occult pneumonia is rather often present in patients with pneumonia and can also be caused by "Streptococcus pneumoniae", as the decrease of occult pneumonia after vaccination of children with a pneumococcal vaccine suggests.

Infiltration commonly begins in the perihilar region (where the bronchus begins) and spreads in a wedge- or fan-shaped fashion toward the periphery of the lung field. The process most often involves the lower lobe, but may affect any lobe or combination of lobes.

"M. pneumoniae" infections can be differentiated from other types of pneumonia by the relatively slow progression of symptoms. A positive blood test for cold-hemagglutinins in 50–70% of patients after 10 days of infection (cold-hemagglutinin-test should be used with caution or not at all, since 50% of the tests are false-positive), lack of bacteria in a Gram-stained sputum sample, and a lack of growth on blood agar.

PCR has also been used.

Antibiotics do not help the many lower respiratory infections which are caused by parasites or viruses. While acute bronchitis often does not require antibiotic therapy, antibiotics can be given to patients with acute exacerbations of chronic bronchitis. The indications for treatment are increased dyspnoea, and an increase in the volume or purulence of the sputum. The treatment of bacterial pneumonia is selected by considering the age of the patient, the severity of the illness and the presence of underlying disease. Amoxicillin and doxycycline are suitable for many of the lower respiratory tract infections seen in general practice.

Treatment for "Klebsiella" pneumonia is by antibiotics such as aminoglycosides and cephalosporins, the choice depending upon the person’s health condition, medical history and severity of the disease.

"Klebsiella" possesses beta-lactamase giving it resistance to ampicillin, many strains have acquired an extended-spectrum beta-lactamase with additional resistance to carbenicillin, amoxicillin, and ceftazidime. The bacteria remain susceptible to aminoglycosides and cephalosporins, varying degrees of inhibition of the beta-lactamase with clavulanic acid have been reported. Infections due to multidrug-resistant gram-negative pathogens in the ICU have invoked the re-emergence of colistin. However, colistin-resistant strains of "K. pneumoniae" have been reported in ICUs. In 2009, strains of "K. pneumoniae" with gene called New Delhi metallo-beta-lactamase ( NDM-1) that even gives resistance against intravenous antibiotic carbapenem, were discovered in India and Pakistan."Klebsiella" cases in Taiwan have shown abnormal toxicity, causing liver abscesses in people with diabetes mellitus (DM), treatment consists of third generation cephalosporins.

Vaccination helps prevent bronchopneumonia, mostly against influenza viruses, adenoviruses, measles, rubella, streptococcus pneumoniae, haemophilus influenzae, diphtheria, bacillus anthracis, chickenpox, and bordetella pertussis.

While antibiotics with activity specifically against "M. pneumoniae" are often used (e.g., erythromycin, doxycycline), it is unclear if these result in greater benefit than using antibiotics without specific activity against this organism in those with an infection acquired in the community.

Due to the importance of disease caused by "S. pneumoniae" several vaccines have been developed to protect against invasive infection. The World Health Organization recommend routine childhood pneumococcal vaccination; it is incorporated into the childhood immunization schedule in a number of countries including the United Kingdom, United States, and South Africa.

Antibiotics are the treatment of choice for bacterial pneumonia, with ventilation (oxygen supplement) as supportive therapy. The antibiotic choice depends on the nature of the pneumonia, the microorganisms most commonly causing pneumonia in the geographical region, and the immune status and underlying health of the individual. In the United Kingdom, amoxicillin is used as first-line therapy in the vast majority of patients acquiring pneumonia in the community, sometimes with added clarithromycin. In North America, where the "atypical" forms of community-acquired pneumonia are becoming more common, clarithromycin, azithromycin, or fluoroquinolones as single therapy have displaced the amoxicillin as first-line therapy.

Local patterns of antibiotic-resistance always need to be considered when initiating pharmacotherapy. In hospitalized individuals or those with immune deficiencies, local guidelines determine the selection of antibiotics.

People who have difficulty breathing due to pneumonia may require extra oxygen. An extremely sick individual may require artificial ventilation and intensive care as life-saving measures while his or her immune system fights off the infectious cause with the help of antibiotics and other drugs.

Mycoplasma is found more often in younger than in older people.

Older people are more often infected by Legionella.

Depending on the nature of infection an appropriate sample is collected for laboratory identification. Pneumococci are typically gram-positive cocci seen in pairs or chains. When cultured on blood agar plates with added optochin antibiotic disk they show alpha-hemolytic colonies and a clear zone of inhibition around the disk indicating sensitivity to the antibiotic. Pneumococci are also bile soluble. Just like other streptococci they are catalase-negative. A Quellung test can identify specific capsular polysaccharides.

Pneumococcal antigen (cell wall C polysaccharide) may be detected in various body fluids. Older detection kits, based on latex agglutination, added little value above Gram staining and were occasionally false-positive. Better results are achieved with rapid immunochromatography, which has a sensitivity (identifies the cause) of 70–80% and >90% specificity (when positive identifies the actual cause) in pneumococcal infections. The test was initially validated on urine samples but has been applied successfully to other body fluids. Chest X-rays can also be conducted to confirm inflammation though are not specific to the causative agent.

Aspiration pneumonia is typically diagnosed by a combination of clinical circumstances (a debilitated or neurologically impaired person), radiologic findings (an infiltrate in the proper location), and sometimes with the help of microbiologic cultures. Some cases of aspiration pneumonia are caused by aspiration of food particles or other particulate substances like pill fragments; these can be diagnosed by pathologists on lung biopsy specimens.

The incidence of pleural empyema and the prevalence of specific causative microorganisms varies depending on the source of infection (community acquired vs. hospital acquired pneumonia), the age of the patient and host immune status. Risk factors include alcoholism, drug use, HIV infection, neoplasm and pre-existent pulmonary disease. Pleural empyema was found in 0.7% of 3675 patients needing hospitalization for a community acquired pneumonia in a recent Canadian single-center prospective study. A multi-center study from the UK including 430 adult patients with community acquired pleural empyema found negative pleural-fluid cultures in 54% of patients, Streptococcus milleri group in 16%, Staphylococcus aureus in 12%, Streptococcus pneumoniae in 8%, other Streptococci in 7% and anaerobic bacteria in 8%. Given the difficulties in culturing anaerobic bacteria the frequency of the latter (including mixed infections) might be underestimated.

The risk of empyema in children seems to be comparable to adults. Using the United States Kids’ Inpatient Database the incidence is calculated to be around 1.5% in children hospitalized for community acquired pneumonia, although percentages up to 30% have been reported in individual hospitals, a difference which may be explained by an transient endemic of highly invasive serotype or overdiagnosis of small parapneumonic effusions. The distribution of causative organisms does differ greatly from that in adults: in an analysis of 78 children with community acquired pleural empyema, no micro-organism was found in 27% of patients, Streptococcus pneumoniae in 51%, Streptococcus pyogenes in 9% and Staphylococcus aureus in 8%.

Although pneumococcal vaccination dramatically decreased the incidence of pneumonia in children, it did not have this effect on the incidence of complicated pneumonia. It has been shown that the incidence of empyema in children was already on the rise at the end of the 20th century, and that the widespread use of pneumococcal vaccination did not slow down this trend. This might in part be explained by a change in prevalence of (more invasive) pneumococcal serotypes, some of which are not covered by the vaccine, as well a rise in incidence of pneumonia caused by other streptococci and staphylococci. The incidence of empyema seems to be rising in the adult population as well, albeit at a slower rate.

The initial investigations for suspected empyema remains chest X-ray, although it cannot differentiate an empyema from uninfected parapneumonic effusion. Ultrasound must be used to confirm the presence of a pleural fluid collection and can be used to estimate the size of the effusion, differentiate between free and loculated pleural fluid and guide thoracocentesis if necessary. Chest CT and MRI do not provide additional information in most cases and should therefore not be performed routinely. On a CT scan, empyema fluid most often has a radiodensity of about 0-20 Hounsfield units (HU), but gets over 30 HU when becoming more thickened with time.

The most often used "golden" criteria for empyema are pleural effusion with macroscopic presence of pus, a positive Gram stain or culture of pleural fluid, or a pleural fluid pH under 7.2 with normal peripheral blood pH. Clinical guidelines for adult patients therefore advocate diagnostic pleural fluid aspiration in patients with pleural effusion in association with sepsis or pneumonic illness. Because pleural effusion in the pediatric population is almost always parapneumonic and the need for chest tube drainage can be made on clinical grounds, British guidelines for the management of pleural infection in children do not recommend diagnostic pleural fluid sampling.

Blood and sputum culture has often already been performed in the setting of community acquired pneumonia needing hospitalization. It should however be noted that the micro-organism responsible for development of empyema is not necessarily the same as the organism causing the pneumonia, especially in adults. As already mentioned before, sensitivity of pleural fluid culture is generally low, often partly due to prior administration of antibiotics. It has been shown that culture yield can be increased from 44% to 69% if pleural fluid is injected into blood culture bottles (aerobic and anaerobic) immediately after aspiration. Furthermore, diagnostic rates can be improved for specific pathogens using polymerase chain reaction or antigen detection, especially for Streptococcus pneumoniae, Streptococcus pyogenes and Staphylococcus aureus. In a study including 78 children with pleural empyema, the causative micro-organism could be identified using direct culture of fresh pleural fluid in 45% of patients, with an additional 28% using PCR on pleural fluid of negative cultures. Pneumococcal antigen detection in pleural fluid samples by latex agglutination can also be useful for rapid diagnosis of pneumococcal empyema. In the previously noted study, positive and negative predictive value of pneumococcal antigen detection was 95% and 90%, respectively. However, despite the additional diagnostic value of these tests, PCR and antigen detection have limited value in determining treatment choice because of the lack of information on antibiotic resistance.

A 2014 systematic review of clinical trials does not support using routine rapid viral testing to decrease antibiotic use for children in emergency departments. It is unclear if rapid viral testing in the emergency department for children with acute febrile respiratory infections reduces the rates of antibiotic use, blood testing, or urine testing. The relative risk reduction of chest x-ray utilization in children screened with rapid viral testing is 77% compared with controls. In 2013 researchers developed a breath tester that can promptly diagnose lung infections.

The most common organisms which cause lobar pneumonia are "Streptococcus pneumoniae", also called pneumococcus, "Haemophilus influenzae" and "Moraxella catarrhalis". "Mycobacterium tuberculosis", the tubercle bacillus, may also cause lobar pneumonia if pulmonary tuberculosis is not treated promptly.

Like other types of pneumonia, lobar pneumonia can present as community acquired, in immune suppressed patients or as nosocomial infection. However, most causative organisms are of the community acquired type.

Pathological specimens to be obtained for investigations include:

1. Sputum for culture, AAFBS and gram stain

2. Blood for full hemogram/complete blood count, ESR and other acute phase reactants

3. Procalcitonin test, more specific

The identification of the infectious organism (or other cause) is an important part of modern treatment of pneumonia. The anatomical patterns of distribution can be associated with certain organisms, and can help in selection of an antibiotic while waiting for the pathogen to be cultured.

In immunocompromised patients, prophylaxis with co-trimoxazole (trimethoprim/sulfamethoxazole), atovaquone, or regular pentamidine inhalations may help prevent PCP.

Antipneumocystic medication is used with concomitant steroids in order to avoid inflammation, which causes an exacerbation of symptoms about four days after treatment begins if steroids are not used. By far the most commonly used medication is trimethoprim/sulfamethoxazole, but some patients are unable to tolerate this treatment due to allergies. Other medications that are used, alone or in combination, include pentamidine, trimetrexate, dapsone, atovaquone, primaquine, pafuramidine maleate (under investigation), and clindamycin. Treatment is usually for a period of about 21 days.

Pentamidine is less often used as its major limitation is the high frequency of side effects. These include acute pancreatic inflammation, kidney failure, liver toxicity, decreased white blood cell count, rash, fever, and low blood sugar.