The incidence of Clostridium difficile- associated diarrhea (CDAD) has increased dramatically in hospitals worldwide during the past 2 decades. In Western Australia, this increase was most obvious during the 1980s, when there was also an increase in the use of third- generation cephalosporin antibiotics. A study of the epidemiology of CDAD and the use of third- generation cephalosporins during 1993- 2000 was undertaken. From 1993 through 1998, the incidence of CDAD remained relatively stable (2- 3 cases per 1000 discharges annually). Then, a significant decrease in the incidence occurred, from 2.09 cases per 1000 discharges (95% confidence interval [CI], 1.71- 2.47) in 1998 to 0.87 cases per 1000 discharges (95% CI, 0.63- 1.11) in 1999 (P <.0001); this decrease persisted into 2000. A decrease in third- generation cephalosporin use occurred during the period of the study because of changes in the prescribing policy. These findings suggest that a reduction in the use of third- generation cephalosporins can reduce the occurrence of CDAD.