Understaffing and overcrowding in the neonatal nursery are thought to contribute to the spread of infectious diseases among neonates, although little scientific documentation exists to support the view. In the present investigation of recurring epidemics in one nursery, the incidence rate of clustered staphylococcal infection was 16 times higher after periods when the infant:nurse ratio exceeded 7, seven times higher after periods when the infant census exceeded 33, three times higher in the summer months, and 1.5 times higher in the absence of bathing with hexachlorophene. All four factors were significantly associated with infection in a multivariate statistical model which predicted the occurrence of infection well (goodness-of-fit chi 2 = 6.08; df = 9; P = 0.73). These results support the contention that staphylococcal outbreaks periodically resulted when, in the presence of overcrowding, serious understaffing made frequent handwashing between infant contacts difficult. Elimination of these problems appears to be important in reducing cross infection in the nursery.