Using AIDS surveillance data, we analyzed trends and correlates of outpatients AIDS diagnosis in Oregon and Washington. The proportion of outpatient diagnoses rose from 24% of cases in 1987 to 51% in 1990. Case characteristics associated with outpatient diagnosis included white race, urban residence, and the exposure category of male homosexual/bisexual contact. AIDS-defining conditions associated with outpatient diagnosis included Kaposi's sarcoma, HIV wasting syndrome, and esophageal candidiasis. Completeness and timeliness of reporting was poorer for cases diagnosed as outpatients compared with inpatients. As outpatient diagnosis becomes more common, modified surveillance methods may be needed to ensure complete case finding and consequent reliability of AIDS surveillance information.