Three neonates and three other patients located elsewhere in the hospital became infected with Staphylococcus aureus. Initial automated microdilution susceptibility testing with oxacillin and disk diffusion testing with amoxicillin-clavulanic acid indicated the isolates had borderline oxacillin resistance (MICs 4 micrograms/ml), presumably due to hyperproduction of beta-lactamase. Chromosomal DNA restriction fingerprinting and phage typing revealed the neonatal isolates to be identical; whereas, the other patients were infected with three different strains. Further analysis of the four strains by Southern hybridization with a mecA specific oligoprobe and a quantitative beta-lactamase assay demonstrated that two strains carried the mecA gene (coding for low affinity penicillin-binding protein 2a), and two strains were hyperproducers of beta-lactamase, including one which was mecA gene positive. One strain neither carried the mecA gene nor hyperproduced beta-lactamase. The two mecA gene positive strains displayed oxacillin MICs of 16 micrograms/ml on dilution susceptibility testing in 4% NaCl supplemented Mueller-Hinton agar. Hence, they were considered intrinsically methicillin-resistant Staphylococcus aureus. Both oxacillin and amoxicillin-clavulanic acid MICs were increased on NaCl supplementation. Results of amoxicillin-clavulanic acid disk diffusion susceptibility testing did not correlate with quantitative beta-lactamase production. It is recommended that clinical laboratories do not use amoxicillin-clavulanic acid disk diffusion assays to differentiate suspected borderline resistance due to beta-lactamase hyperproduction from mecA gene expression of PBP-2a since additional mechanisms may account for resistance.