During a 5-month period, 17 infants hospitalized in neonatal intensive care units of a medical center and a branch hospital developed 18 episodes of Candida parapsilosis fungemia. The mean age at onset was 35 days. Prior to fungemia, all the infants had received hyperalimentation and antibiotics, and 15 infants had had central venous catheters. The presenting symptoms were variable but only vague in 40% of the episodes. Despite administration of antifungal agents, subsequent eradication of fungemia was achieved in only two-thirds of the episodes. None of the environmental samples was positive for C. parapsilosis, while 20% of hand-washing samples of staff working in both units yielded this microorganism. Four genotypes with two main types were identified from 14 outbreak strains and eight genotypes from 14 hand-washing strains, with one type predominant. The results suggest that C. parapsilosis fungemia increases the morbidity and mortality of neonates but does not cause acute lethal events. The outbreak was caused by two main genotypes, possibly via cross-infection by the hands of health care workers.