Serratia marcescens rarely causes infections in newborn infants. We recently studied an epidemic caused by a multiply-resistant, serotype 014:H12 Serratia marcescens that involved 42 infants. Cutaneous abscesses at previous intravenous infusion sites occurred nine times, usually required surgical drainage, and were the most striking infections during the outbreak. Six infants developed Serratia bacteremia and two died with Serratia meningitis; 34 patients were colonized with Serratia but remained uninfected. An epidemiologic investigation of the 83 infants at risk in the nursery assessed factors predisposing them to colonization or infection with the epidemic organism. Colonization of the throat, umbilicus, gastrointestinal tract, or skin was frequent among infants as was carriage of Serratia on nursey employees' hands. Infected and colonized infants were the most important reservoir for Serratia in the nursery and cross-infection between infants readily occurred. Scalp-vein needles appeared to provide a portal of entry of Serratia in colonized infants, predisposing them to abscess formation and bacteremia.