Five infants born at one hospital over a two-year period developed meningitis due to a serotype O2 strain of Citrobacter diversus; four infants developed brain abscesses due to this organism. The initial prevalence of stool colonization in infants was 79%; eventually 140 infants (10%) and six nurses (6%) were found to be colonized. One colonized infant remained in the hospital for the entire two-year period. The strains were of two biotypes marked by the presence (biotype d) or absence (biotype a) of fermentation of sucrose and dulcitol. The biotype d strain was found in the five infants with meningitis, 110 asymptomatic infants, and five nurses. The biotype a strain, which was isolated from 30 infants and one nurse, did not cause disease. Colonized infants were distinguished by intensive care therapy (P = 10-31), gavage feeding (P = 0.036), and prenatal intrauterine monitoring (P = 0.037). These findings suggest a fecal reservoir and person-to-person transmission of C. diversus. Measures to control the outbreak cost about $110,000.