Rapid and accurate pathogen identification is necessary for appropriate treatment of pneumonia. Here, we describe the use of shotgun metagenomic next-generation sequencing (mNGS) of bronchoalveolar lavage for pathogen identification in pneumonia in a large-scale multicenter prospective study with 159 patients enrolled. The results of mNGS were compared with standard methods including culture, staining, and targeted PCR, and the clinical impact of mNGS was evaluated. A positive impact was defined by a definitive diagnosis made using the mNGS results, or change of management because of the mNGS results, leading to a favorable clinical outcome. Overall, mNGS identified more organisms than standard methods (117 versus 72), detected 17 pathogens that consistently were missed in all cases by standard methods, and had an overall positive clinical impact in 40.3% (64 of 159) of cases. mNGS was especially useful in identification of fastidious and atypical organisms causing pneumonia, contributing to detection of definitive pathogens in 45 (28.3%) cases in which standard results were either negative or insufficient. mNGS also helped reassure antibiotic de-escalation in 19 (11.9%) cases. Overall, mNGS led to a change of treatment in 59 (37.1%) cases, including antibiotic de-escalation in 40 (25.2%) cases. This study showed the significant value of mNGS of bronchoalveolar lavage for improving the diagnosis of pneumonia and contributing to better patient care.