Over a 15-month period 732 babies were admitted to a neonatal unit, and Serratia marcescens was isolated from 153 (21%). In one-fifth (34) a clinical infection (9 major and 25 minor) developed. Major infection was associated with high mortality and morbidity and 2 cases presented after the neonatal period. No environmental reservoir was found. Colonised symptom-free neonates were considered to be the source, with transmission by staff-baby contact despite adequate hand-washing. Overcrowding was believed to be responsible for the difficulties experienced in eradicating this transmission.