Inexpensive, rapid, and reliable tests for detecting the presence and drug susceptibility of Mycobacterium tuberculosis complex (MTBC) are urgently needed to control the transmission of tuberculosis. In this study, we aimed to assess the accuracy and speed of the microscopic-observation drug susceptibility (MODS) assay in the identification of MTBC and detection of multidrug resistance. Sputum samples from patients suspected to have tuberculosis were simultaneously tested with MODS and conventional culture [Lowenstein-Jensen (LJ) culture, BACTEC MGIT 960 (MGIT) system], and drug susceptibility testing (MGIT system) methods. A total of 331 sputum samples were analyzed. Sensitivity and specificity of MODS assay for detection of MTBC strains were 96% and 98.8%, respectively. MODS assay detected multidrug resistant MTBC isolates with 92.3% sensitivity and 96.6% specificity. Median time to culture positivity was similar for MGIT (8days) and MODS culture (8days), but was significantly longer with LJ culture (20days) (p<0.0001 for both comparisons). Median time to availability of the susceptibility results was significantly (p<0.0001) shorter with MODS assay (8days) than MGIT system (20days). In conclusion, MODS is an inexpensive and rapid test with good performance characteristics for direct diagnosis of tuberculosis and detection of multidrug resistance.