Klebsiella oxytoca that produced extended-spectrum beta-lactamase (ESBL) and were resistant to ceftazidime were isolated from infants in a neonatal intensive care unit (NICU). During a 30-week period, 3 infants developed infections and an additional 60 infants were colonized with these bacteria. The molecular typing data suggested transmission of a single strain of ceftazidime-resistant K. oxytoca among 48 of the 63 infants. The ESBL of 46 of the 48 similar isolates, 14 of the remaining 15 isolates, and 6 other Enterobacteriaceae appeared to be associated with a conjugative plasmid of approximately 85 kb. The ESBL gene was cloned, and DNA sequencing confirmed that the ESBL was an SHV-5. Hybridization data suggested that the SHV-5 gene was transmitted to other Enterobacteriaceae in vivo. The spread of the ESBL was reduced through adherence to infection control practices.