Recent reports have emphasized an increase in both infection and colonization with methicillin-resistant Staphylococcus aureus (MRSA) in institutionalized older patients. We studied whether or not local treatment with mupirocin ointment could eliminate nasal colonization with S aureus. A total of 102 patients in a Veterans Administration nursing home were screened for S aureus nasal colonization. Thirty-nine patients (38.2%) were colonized, 18 with methicillin-sensitive Saureus (MSSA) and 21 with MRSA. Almost half of all colonized patients were in the most dependent functional category and there was a significant association of MRSA colonization, but not MSSA colonization, with poor functional status. Colonized patients were treated with mupirocin ointment applied to the anterior nares twice daily for seven days. After treatment, MSSA persisted in only two patients and MRSA in only one patient; thus, nasal colonization was eliminated in 91.4% of colonized patients. At one month and two months follow-up, 11 patients became transiently recolonized and three became persistently recolonized with S aureus. Mupirocin was well tolerated with no side effects noted. Mupirocin ointment may be useful in controlling nasal colonization with S aureus in the nursing home setting.