A severe outbreak of hemorrhagic colitis occurred in London, Ontario, during the month of September 1985. A total of 55 residents and 18 employees of a nursing home developed diarrhea, and 17 residents (age range, 78 to 99 years) died. Specimens from 38 patients, 37 employees and contacts, and 10 autopsies were investigated for all enteric pathogens. Specimens were also planted on MacConkey-sorbitol agar. Fecal extracts were tested on Vero cells for cytotoxin (FVT). Escherichia coli isolates were serotyped and tested for verotoxin and beta-glucuronidase production. Of the 38 symptomatic patients, 26 were positive for FVT, verotoxin-producing E. coli (VTEC), or both. Of the 105 specimens that were examined from these 38 patients, FVT and VTEC were both positive in 30 specimens, FVT only was positive in 13 specimens, and VTEC only was positive in 4 specimens. None of the 27 specimens from 10 autopsies was positive for FVT or VTEC. No other enteric pathogen was found in any of the cases. All asymptomatic individuals were negative for both FVT and VTEC. Of 19 VTEC strains that were isolated, 18 belonged to serotype 0157:H7. These 18 strains and 2 more strains that were obtained from sporadic cases that had occurred within the 2 previous months were found to give similar biochemical reactions in a 36-test identification system. All isolates of serotype 0157:H7 were beta-glucuronidase negative and susceptible to the antimicrobial agents that are used to treat E. coli infections. Testing for FVT and VTEC was found to be the most sensitive and specific technique for the laboratory diagnosis of this disease. Negative sorbitol, positive raffinose, and negative beta-glucuronidase tests appeared to be consistent markers for aiding in the detection of E. coli 0157:H7.