An outbreak of lung disease among workers in a metal-working plant included 16 biopsy-confirmed cases of hypersensitivity pneumonitis and additional patients with asthma, bronchiolitis and emphysema, usual interstitial pneumonitis, and sarcoidosis. Study design Clinical examination of patients; cross-sectional questionnaire survey of the outbreak plant and two control plant areas, one with and one without MWF exposures, in a separate facility; industrial hygiene survey with laboratory characterization of microbial flora; and immunological investigation. Patients with suspected hypersensitivity pneumonitis underwent a clinical examination including detailed lung function, imaging, and tissue studies. A plant walk-through identified metal-working processes, microbial aerosols, and work practices. Microbial characteristics of the three microbial aerosol-producing processes were characterized. Antibodies to those agents were determined in patient sera. A questionnaire survey was conducted in the case plant and in two areas of a control plant, one with and one without metal-working fluids exposure. Thirty-nine (79.6%) patients described symptoms consistent with work-related lung disease, eight received other diagnoses, and two did not complete their examinations. Sixteen patients had hypersensitivity pneumonitis confirmed on biopsy. Mean decrements in lung forced expiratory volume in 1 s and force vital capacity from before to after work were similar in the 16 biopsy-confirmed cases of hypersensitivity pneumonitis ( - 6.3%; - 7.2%) and the 19 symptomatic patients without biopsies ( - 11.2%, - 10.1%). Symptoms were more common in the case plant than in a non-MWF control plant area. Three sources of water-based aerosols were identified that grew similar microbial flora. Although machining increased airborne bacterial levels, the increase was not related to the concentration of viable bacteria in the sumps. Antibody testing did not identify a specific single organisms. Endotoxin levels were similar in case and MWF control plant. Lung disease in environments with water-based aerosols may be more common than usually recognized. Patients with HP often present with only subtle abnormalities and may be missed if multiple clinical abnormalities are required to document disease.