To determine the risk factors associated with progression from colonization to infection with health care-associated antimicrobial-nonsusceptible Enterobacteriaceae (ANE) in critically ill neonates.During a 3-year period (1998 to 2000), surveillance rectal cultures were performed on neonates admitted to our Level III neonatal intensive care unit after a cluster of four cases of ANE infection were identified in 1998. ANE were defined as members of the Enterobacteriaceae family that exhibited nonsusceptibility to ceftazidime or laboratory evidence of extended spectrum beta-lactamase (ESBL) production.A total of 1,710 patients were admitted to the neonatal intensive care unit during the study period. Of the 1,710 patients 300 (18%) were excluded from the risk factor analysis. Of the 1,410 remaining neonates the incidence of health care-associated ANE colonization was 17% (240 of 1,410 patients), and 14% of the colonized patients (34 of 240 patients) developed ANE infections. Of the 206 ANE-colonized patients who did not develop disease, 60 (29%) harbored ESBL-producing isolates. Of the 34 ANE-infected patients, 14 (41%) yielded growth of ESBL-producing isolates. Multiple logistic regression analysis revealed that colonized neonates with very low birth weights (<1,000 g) and those who had received prolonged exposures to antimicrobial agents were at increased risk of ANE infections.Colonization with ANE places hospitalized neonates at risk for development of systemic infections. Very low birth weight (<1,000 g) and prolonged exposure to antimicrobial agents were the only two independent risk factors associated with ANE infection.