A survey was undertaken of all isolations of methicillin-sensitive and methicillin-resistant Staphylococcus aureus (MRSA) at a large Australian teaching hospital over a 12 month period. All methicillin-resistant isolations obtained from the Casualty and Outpatient clinics were from staff members or patients with recent hospital contact. Twenty per cent of all methicillin-resistant isolations from in-patients were from specimens taken within 2 days of the patient's admission. Each of these patients had had hospital contact within the previous 4 months and it is assumed that the majority of them reintroduced the organism into the hospital. Such patients may provide an important means by which infection control procedures are bypassed. Patients who were relatively more likely to become infected or colonized with methicillin-resistant than with methicillin-sensitive strains included the elderly and those with postoperative wound infections (especially after orthopaedic or vascular surgery), spinal injuries, peripheral vascular disease, chronic skin ulcers or chronic diseases of the respiratory or urinary tracts. Eleven per cent of MRSA wound isolates and 15 per cent of sputum isolates were associated with serious infections requiring specific treatment, emphasizing the ability of these strains to produce serious illness. A small proportion of staff and asymptomatic patients were found to harbour MRSA and the importance of these individuals in facilitating cross-infection requires further investigation.