BACKGROUND After surveillance surveys documented the absence of methicillin-resistant Staphylococcus aureus (MRSA) in our intensive care nursery, an outbreak of MRSA infection occurred there during a 7-month period in 2005. METHODS Control measures included reinforcement of hand hygiene and contact precautions procedures. Active surveillance cultures were obtained on all neonates, including interinstitutional transfers. A cohort unit was dedicated exclusively for neonates with MRSA. Pulsed-field gel electrophoresis was performed on isolates to determine relatedness. We surveyed transferring hospitals to evaluate MRSA activity and surveillance practices in their nurseries. RESULTS Twenty-five neonates were colonized with MRSA; 9 of these had clinical infections. Isolates from 18 of 21 neonates from this outbreak and 4 neonates from a previous cluster were identical, including 1 isolate obtained upon transfer from another institution. Admission and discharge logs from a 9-month period showed that 127 of 460 admissions (27.6%) were admitted from 34 hospitals, and 247 of 460 (53.7%) were discharged to 32 hospitals. Among 30 transferring hospitals responding to our survey, MRSA activity occurred in 2 of 28 (7%) level 1 nurseries, 4 of 11 (36%) level 2 nurseries and 6 of 10 (60%) level 3 nurseries. Nine of the 30 hospitals (30%) performed some active surveillance. CONCLUSIONS Interinstitutional transfer can play a role in the initiation and propagation of MRSA outbreaks in neonatal nurseries. The burden of MRSA in area nurseries and the rate of transfers affect the potential for interhospital spread of MRSA and may justify changes in policy regarding surveillance for MRSA and communication between hospitals.