BACKGROUND: Inhaled corticosteroids (ICS) are known to increase the risk of pneumonia in patients with chronic obstructive pulmonary disease (COPD). It is unclear whether the risk of pneumonia varies for different inhaled agents, particularly fluticasone and budesonide, and increases with the dose and long-term duration of use. METHODS: We formed a new-user cohort of patients with COPD treated during 1990-2005. Subjects were identified using the Quebec health insurance databases and followed through 2007 or until a serious pneumonia event, defined as a first hospitalisation for or death from pneumonia. A nested case-control analysis was used to estimate the rate ratio (RR) of serious pneumonia associated with current ICS use, adjusted for age, sex, respiratory disease severity and comorbidity. RESULTS: The cohort included 163 514 patients, of which 20 344 had a serious pneumonia event during the 5.4 years of follow-up (incidence rate 2.4/100/year). Current use of ICS was associated with a 69% increase in the rate of serious pneumonia (RR 1.69; 95% CI 1.63 to 1.75). The risk was sustained with long-term use and declined gradually after stopping ICS use, disappearing after 6 months (RR 1.08; 95% CI 0.99 to 1.17). The rate of serious pneumonia was higher with fluticasone (RR 2.01; 95% CI 1.93 to 2.10), increasing with the daily dose, but was much lower with budesonide (RR 1.17; 95% CI 1.09 to 1.26). CONCLUSIONS: ICS use by patients with COPD increases the risk of serious pneumonia. The risk is particularly elevated and dose related with fluticasone. While residual confounding cannot be ruled out, the results are consistent with those from recent randomised trials.