This study was carried out to evaluate changes in infection rates following the adoption of three measures for controlling a Staphylococcus aureus outbreak in a nursery. In late April and early May, 1995, an outbreak of pustular dermatitis and conjunctivitis caused by S. aureus was documented. Case patients were identified by both in-hospital and post-discharge surveillance. In-hospital surveillance included daily review of data gathered by the hospital's infection control committee; use of microbiology laboratory results; requesting charts for antibiotic prescriptions; nurses' notes, and ward rounds surveillance as indicators of S. aureus infection (SAi). Post-discharge surveillance was done by telephone survey around the 30th day after a baby's birth date. During the epidemic period, reinforcement of handwashing, daily bathing, and cord care with antiseptics combined with a cohort system of admissions, and nasal mupirocin ointment were introduced sequentially in an attempt to control the outbreak. The efficacy of these three strategies was measured through the decrease of SAi rates, detected by both in-hospital and post-discharge surveillance. A total of 5,639 babies were included in the study. In-hospital surveillance information was obtained from all patients and post-discharge surveillance in 3,506 (62.7%) patients. A total of 534 SAi were detected during the study, 47 in-hospital and 487 at post-discharge surveillance. A progressive decrease in the SAi rates could be observed after the institution of the control strategies, both in-hospital (7.6% to 0.5%) and after discharge (68.9%. to 11.7%). During the study period, the rates of infection detected in out-patients were consistently higher than those diagnosed in-hospital. Improving handwashing and nasal mupirocin ointment seem to be more effective than cohort admissions and bath and cord care with antiseptics. The high SAi rates detected only after discharge from the hospital indicate that data from post-discharge surveillance should be included to estimate the true rates of infections in newborns.