An outbreak of multi-resistant Serratia marcescens involving 24 patients occurred in a bone marrow transplant and oncology unit, from September 1998 to June 1999, of whom 14 developed serious infection. This is the first such outbreak described in a BMT unit. All isolates demonstrated the same antimicrobial susceptibility pattern and were the same unusual serotype O21:K14. The antimicrobial susceptibility profile showed reduced susceptibility to ciprofloxacin, gentamicin and piperacillin-tazobactam. As the latter two antimicrobials are part of our empiric therapy for febrile neutropenia, they were substituted with meropenem and amikacin during the outbreak. Investigation revealed breaches in infection control practices. Subsequently, the outbreak was contained following implementation of strict infection control measures. A prominent feature of the outbreak was prolonged carriage in some patients. These patients may have acted as reservoirs for cross-infection. This report also indicates that patients who become colonised with Serratia marcescens may subsequently develop invasive infection during neutropenic periods.