In the course of an outbreak of enteritis and conjunctivitis, S. aureus was isolated from newborn infants. Strains cultured at a later phase of the outbreak differed from those found at the beginning in being resistant to several antibiotics, showing resistance to typing phages and releasing phages of the same lysis spectrum. Transduction experiments with a strain and its cell-free lysate showed that inducible erythromycin resistance was transferable to strains isolated at the beginning of the outbreak and to laboratory strains. Plasmid origin of resistance was confirmed by high transduction frequency, transduction to RN981 rec- mutants, kinetics of transduction and elimination of resistance. Mixed culture experiments yielded transductants at high frequency with resistance to erythromycin, streptomycin and tetracycline.