Malassezia furfur, a lipophilic yeast, has become recognized as a cause of sepsis in infants receiving parenteral fat emulsions via indwelling deep venous catheters. Colonization of infants' skin may be a prerequisite to colonization of the intravascular catheter and subsequent infection with M furfur. Three hundred ninety-three surveillance cultures were performed on 146 infants during their first 12 weeks of hospitalization in the intensive care unit (ICU) or the neonatal transitional unit (NTU). In addition, 47 full-term newborn infants and 38 healthy infants in the well-baby clinic were cultured. Colonization rates were greatest (48%) during the second month of hospitalization for the infants in the ICU/NTU group. In contrast, 0 of 47 newborn infants and 2 of 38 healthy infants were colonized. Prematurity and a prolonged length of stay were identified as risk factors for colonization.