BACKGROUND: Despite screening of blood donors, hepatitis C virus (HCV) infection can occur in patients who receive multiple transfusions. OBJECTIVE: To clarify mechanisms of nosocomial transmission of HCV. DESIGN: Epidemiologic and molecular analyses of hepatitis C outbreaks. SETTING: Pediatric oncology ward. PATIENTS: Children with cancer. MEASUREMENTS: Epidemiologic analysis, HCV RNA detection, genotyping, and hypervariable region 1 (HVR1) sequencing. RESULTS: Ten cases of infection with acute HCV genotype 3a occurred between 1990 and 1993. Sequencing of HVR1 revealed three related strains. Despite an overhaul of hygiene procedures, a patient infected with genotype 1b generated nine subsequent infected patients in 1994. Several patients had high virus titers and strongly delayed anti-HCV antibody responses. All had permanent intravenous catheters. Multidose vials used for flushing or treatment had probably been contaminated during periods of overlapping treatment. CONCLUSIONS: Contamination of multidose vials was the most likely mode of HCV transmission; therefore, use of such vials should be restricted. Rigorous adherence to hygiene routines remains essential to preventing transmission of bloodborne infections.