During an eight-month period, 25 hospitalized patients became infected or colonized with methicillin-resistant Staphylococcus aureus (MRSA) in a 464-bed acute care, medical-surgical teaching hospital. There were only five cases during the eight months prior to the outbreak period (P < 0.0001). Initial measures, including category-specific isolation and education, did not limit the spread of the outbreak of a strain of MRSA. This prompted institution of additional measures including (1) strict isolation of all infected and colonized cases; (2) prospective microbiological surveillance to detect additional cases; (3) multiple site cultures of identified cases to determine the extent of colonization; (4) employee and environment surveillance; (5) antibiotic decolonization of patients and employees; and (6) educational efforts. The highest number of personnel carriers were noted in one of the critical care units where most of the cases occurred. The decolonization protocol was 100% effective for personnel carriers. The incidence of nosocomial cases of MRSA fell to zero in the five months following the implementation of the strategy. The cost of the entire eradication process was approximately half that of treating a single MRSA bacteremia.