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Abstract Background Studies examining the transmission of multidrug-resistant tuberculosis (MDR-TB) strains have yielded conflicting results. Methods We examined transmission of MDR-TB strains using contact tracing data from a low incidence setting. Contacts of MDR-TB cases diagnosed in British Columbia, Canada, from 1990-2008 were identified through a provincial tuberculosis (TB) registry. Tuberculin skin test (TST) results and TB disease incident rates were determined for contacts. For comparison, TB disease incident rates and TST results were measured in close contacts of isoniazid mono-resistant (HMR-TB) and drug susceptible TB (DS-TB) cases. Results Of 89 identified close contacts of MDR-TB patients, 5 patients (6%) developed TB disease and 42 (47%) were TST positive. The incidence rate of TB disease (3%, p = 0.31) and TST positivity (49%, p = 0.82) were similar in contacts of HMR-TB cases. Compared with MDR-TB contacts, DS-TB contacts had lower incidence rate of TB disease (2%, p = 0.04) and TST positivity (32%, p Conclusion Contacts of MDR-TB and HMR-TB patients in a low incidence setting show high rates of TST positivity and TB disease but low rates of drug resistance.