We describe an epidemiologic investigation that elucidated the cause of vesicular and bullous skin lesions of the hands and feet that occurred in three otherwise well neonates during a 24-hour period. The investigation encompassed two well-baby nurseries of 28 and 17 beds and one level III neonatal intensive care unit (NICU) of 31 beds located in a 440-bed university-affiliated community hospital. Work-up for infectious causes of the skin lesions in the initial three cases had negative results. Expanded case surveillance disclosed seven additional cases that had occurred within the previous 2 weeks in the NICU. Analysis of risk factors focused attention on the insertion technique for peripheral intravenous catheters. This led to the discovery of a defective transillumination device, the tip of which reached a temperature of 88 degrees C within 20 seconds, causing thermal burns. The cause of the malfunction was the failure to install an infrared filter during the manufacture of the device. No additional cases were observed after the defective unit was removed from service. In summary, a defective transilluminating device caused a cluster of thermal burns in a newborn nursery and NICU. Epidemiologic investigation of the cluster allowed the investigators to focus on techniques of intravenous catheter insertion, which thus led to the identification of the cause of the injuries. With the increasing emphasis on health outcomes measurement, hospital epidemiologists will likely have an expanding role in investigating clusters of noninfectious adverse events.