Between December, 1974, and August 1975, intestinal illness occurred in 55 of 205 infants admitted to the special-care nurseries of a large children's hospital. Escherichia coli serotype 078:K80:H12, which produced a heat-stable enterotoxin, was isolated from 18 of 25 symptomatic infants as compared with 14 of 55 asymptomatic infants (P less than 0.001). Colistin administered prophylactically to 24 culture-negative asymptomatic infants did not prevent colonization in 10, whereas colonization did occur in 22 of 56 not receiving colistin (P = 1.0). This outbreak provides laboratory and epidemiologic evidence that heat-stable enterotoxigenic Esch. coli is pathogenic in human beings and produces infantile diarrhea.