Seven children (aged 8--17 years) presented with a high fever, headache, confusion, conjunctival hyperaemia, a scarlatiniform rash, subcutaneous oedema, vomiting, watery diarrhoea, oliguria, and a propensity to acute renal failure, hepatic abnormalities, disseminated intravascular coagulation, and severe prolonged shock. One patient died, one had gangrene of the toes, and all have had fine desquamation of affected skin and peeling of palms and soles during convalescence. Five patients were studied prospectively. Staphylococcus aureus related to phage-group I was isolated from mucosal (nasopharyngeal, vaginal, tracheal), or sequestered (empyema, abscess) sites, but not from blood. This organism produces an exotoxin which causes a positive Nikolsky sign in the newborn mouse and which is biochemically, pathologically, and immunologically distinct from phage-group-II stapphylococcal exfoliatin.