We investigated an increase in cases of multidrug-resistant tuberculosis (MDRTB) at a large urban facility where a prior nosocomial outbreak of MDRTB had occurred. Nosocomial transmission appeared to account for this outbreak as well, including a cluster of cases in a newborn nursery. Seven of 24 patients (29%) described in this investigation may have been exposed in the hospital nursery during an approximately 2-week period. We believe this to be the first documented outbreak of MDRTB in a hospital nursery. The transmission in the nursery demonstrates that the possibility of exposure to unrecognized active tuberculosis in nursery and hospital personnel is always present. Infection and active disease in the infants developed after a relatively short period of exposure. These findings underscore the need for adherence to published infection control guidelines in health care settings.