On July 8, 2014, the Colorado Department of Public Health and Environment (CDPHE) laboratory identified Yersinia pestis, the bacterium that causes plague, in a blood specimen collected from a man (patient A) hospitalized with pneumonia. The organism had been previously misidentified as Pseudomonas luteola by an automated system in the hospital laboratory. An investigation led by Tri-County Health Department (TCHD) revealed that patient A's dog had died recently with hemoptysis. Three other persons who had contact with the dog, one of whom also had contact with patient A, were ill with fever and respiratory symptoms, including two with radiographic evidence of pneumonia. Specimens from the dog and all three human contacts yielded evidence of acute Y. pestis infection. One of the pneumonia cases might have resulted through human-to-human transmission from patient A, which would be the first such event reported in the United States since 1924. This outbreak highlights 1) the need to consider plague in the differential diagnosis of ill domestic animals, including dogs, in areas where plague is endemic; 2) the limitations of automated diagnostic systems for identifying rare bacteria such as Y. pestis; and 3) the potential for milder plague illness in patients taking antimicrobial agents. Hospital laboratorians should be aware of the limitations of automated identification systems, and clinicians should suspect plague in patients with clinically compatible symptoms from whom P. luteola is isolated.