Enterococci with high-level resistance to gentamicin account for 55% of clinical isolates of enterococci found in patients at the Ann Arbor Veterans Administration Medical Center. We prospectively studied cultures obtained from all 100 patients hospitalized from 1 December 1985 through 23 January 1986 on the surgical and thoracic intensive care units and a general medical floor. Ten patients' cultures grew colonies of gentamicin-resistant enterococci--six after admission to the intensive care units and four after hospitalization on the medical ward. The initial sites of colonization were the rectal and perineal areas in seven patients, sternal wound in one, urine in one, and the rectal and perineal areas as well as urine after Foley catheter insertion in one. Nine patients died and three of the deaths were associated with enterococcal infection. The acquisition of resistant strains was associated with previous and more frequent exposure to antimicrobial agents, and with geographic clustering of patients. Resistant enterococci were isolated from the hands of hospital personnel and were frequently isolated from environmental surfaces. Nosocomial acquisition and interhospital spread of gentamicin-resistant enterococci was shown to have occurred when plasmid content was used as an epidemiologic marker.