Multidrug-resistant tuberculosis (MDRTB) has emerged as a major public health problem worldwide. To determine the incidence and risk factors associated with tuberculosis among contacts of MDRTB index cases, we studied human immunodeficiency virus-seronegative close contacts of 64 culture-confirmed MDRTB patients in Rio de Janeiro, Brazil. Between March 1988 and July 1992, tuberculosis developed in 17 (7.8%) of 218 previously healthy close contacts of 64 MDRTB index cases (1.6 cases per 1,000-person-months of contact). Among strains of Mycobacterium tuberculosis isolated from 13 contacts of 12 index cases, six (46%) had susceptibility patterns identical to those of their index cases, four (31%) had different patterns of resistance, and three (23%) were susceptible to all drugs. Tuberculosis developed more frequently in male contacts (p < 0.05), persons > or = 15 yr of age (p < 0.05), nonwhites (p < 0.001), and persons not previously vaccinated with bacillus Calmette-Guerin (BCG) (p < 0.05). The association of BCG vaccination with decreased risk of disease was significant even when this variable was controlled (by Cox's regression analysis) for age, sex, race, purified protein derivative (PPD) status, and isoniazid prophylaxis. BCG vaccination appears to offer protection against tuberculosis during prolonged exposures to persons with MDRTB, which identifies a novel and specific indication of BCG use.