Background: Guizhou Province in Southwest China has experimented with a centralized hospitalization (CH) treatment for active and severe cases of pulmonary tuberculosis (PTB). The objective of this study was to compare treatment outcomes of patients with tuberculosis (TB) receiving care in a CH setting with those receiving home-based (HB) care. In addition, this study aimed to assess the probability of their household contacts contracting tuberculosis infection. Method: A retrospective review of medical records was undertaken for patients with TB who completed their treatment in four counties in Guizhou, China, spanning from January 2022 to August 2023. In addition, a cross-sectional survey was conducted on the tuberculin skin test (TST) among household contacts of new patients with TB who had completed their treatment. Results: In the retrospective study, 94.8% had successful CH treatment, and 93.1% had successful HB treatment (p value = 0.70). In the prospective study, 559 and 448 household contacts of patients receiving CH treatment had 16 positive and 89 negative TST results, whereas those with HB treatment showed 26 positive and 74 negative TST results. Regarding a logistic regression analysis, the CH group was nearly two times more likely to test negative on the TST, 1.95 (95% CI: 0.98, 3.92). After adjusting for confounding variables, the odds ratio increased significantly to 4.42 (95% CI: 1.22, 16.04). Conclusions: CH for treatment of TB did not show superior success rates, but it may reduce the risk of transmitting tuberculosis infection to household contacts compared to home treatment.