An outbreak of staphylococcal bacteremia in healthy, full-term neonates occurred in the newborn nursery at a large county hospital not employing prophylactic hexachlorophene bathing. Seven infants had staphylococcal bacteremia and one had omphalitis. Two of the three isolates obtained for phage typing were type 86, and the other was 3c/71. Staphylococcal colonization rate in the nursery was 64% when the outbreak was recognized; 86% of these isolates were type 86. No predominant phage type was isolated from nursery personnel. The outbreak followed a six-month preliminary study that showed a rise in staphylococcal colonization rate from 2.2% with hexachlorophene bathing to 67% with a nonhexachlorophene-containing preparation. In a community survey of infants born during the two months prior to the epidemic, seven of eight babies with lesions were infected with Staphylococcus aureus type 86.