In a premature infant nursery 3 infants died of E. coli infections and 5 babies contracted urinary tract infection due to E. coli within a 5-month period. The causative organisms were found to be resistant to tetracycline, streptomycin, chloramphenicol, and sulfisoxazole, and sensitive to kanamycin, polymyxin B, and nitrofurantoin. From throat and stool cultures of 25 infants in the nursery, E. coli with this susceptibility pattern were recovered from 13. Of these, 9 were serotype 04:H5 and one was group 04 but nonmotile. Isolates from the urine of 3 infants with urinary tract infection and meninges of one fatal case were serotype 04:H5. Stool cultures revealed group 04 E. coli only in infants with that organism in the throat. The findings indicate that an outbreak of infections due to E. coli 04:H5 had occurred as a consequence of widespread colonization with that organism in a premature infant nursery. The unusual incidence of urinary tract infection due to a specific E. coli serotype indicates that urosepsis in the newborn can occur in epidemic form.