Klebsiella oxytoca outbreak at the Ethio-Swedish Children's Hospital, is described. The organism was isolated for the first time on Oct. 1992 at the emergency room and subsequently spread to all wards including the neonatal unit of the hospital. The isolates were resistant to Ampicillin, Amoxicillin, Chloramphenicol, Co-trimoxazole and Gentamicin, but sensitive to Amikacin and ceftriaxone. Eighty six percent (182) of the isolates were from blood specimen. Nine out of ten suspected intravenous infusion bags were positive for Klebsiella oxytoca. The source of this nosocomial infection and possible control measures are discussed.