A case-control study was conducted on an epidemic of bacteremia and meningitis caused by Serratia marcescens in the neonatal intensive care unit and special care nursery of a general hospital in Mexico City, Mexico. A 19.9% incidence of bacteremia and meningitis was recorded in contrast to 1.4% and 3.7% during preepidemic and post-epidemic periods; a 69% mortality rate was observed. Peripheral IV catheters and the use of mixed IV fluids prepared in the wards were the major risk factors (P less than 0.001). Rectal and nasopharyngeal cultures were positive in 68% of asymptomatic neonates and hand cultures were positive in 16.7% of personnel. Strains were resistant to all aminoglycosides and broad-spectrum penicillins, and belonged to the A5/8 biogroup. Containment of this outbreak was difficult because of failure to identify colonized infants early in the epidemic and because of persistent carriage of S marcescens by personnel. Comparisons between this hospital and tertiary care centers in Mexico suggest that in developing countries nosocomial infections could be of greater magnitude in secondary than in tertiary level centers.