Staphylococcus aureus and Staphylococcus epidermidis were the most important gram positive pathogens found in a five-year study (1985-1989) of nosocomial infection in this hospital. They caused 56.2% of all nosocomial infections in this newborn nursery, particularly skin infections. To determine the reasons, and to decrease effectively the neonatal staphylococcal colonization rate, three different disinfection methods were selected for management of neonatal umbilical cords. A total of 1578 swabs from neonatal nares and umbilical cords were collected. During the first period no disinfectant was applied to the cord after bathing the baby. Beta-iodine in alcohol and bacitracin ointment were used for the second and the third periods, respectively. The result showed a significant difference (P less than 0.05) in staphylococcal colonization rate on neonatal umbilical cord using different disinfectants even after the first day. The same result for neonatal nares was also found, after infants had been in the nursery for two days. During the third period, no case of skin infection was found. Most Staphylococcus aureus isolated were resistant to ampicillin, erythromycin, tetracycline and penicillin. The percentage of this antibiogram found in neonatal nares and umbilical cords was 44% and 56% respectively. Besides nosocomial infection control and surveillance of medical personnel, environment, materials, instruments and isolation techniques, it is really necessary to choose an effective disinfectant (bacitracin ointment is recommended) to reduce the staphylococcal colonization in newborn nurseries.