This article describes an outbreak of methicillin-resistant Staphylococcus aureus (MRSA) in two institutions for multi-handicapped children in Copenhagen. The aim of the study was to determine whether it was possible to eradicate MRSA in a setting with multi-handicapped children and staff where there was a high degree of physical interaction. This was a prospective interventional uncontrolled cohort study that took place from January 2003 to March 2005. All individuals in close contact with the two institutions and/or in close contact with an MRSA-colonized subject from the outbreak were included in the study: 38 children, 60 staff members and 12 close relatives of colonized subjects. Infection control measures included screening all individuals. When MRSA infection or colonization was found, an attempt was made to eradicate MRSA, staff education was undertaken and attempts were made to determine the route of transmission. Eleven individuals were found to be positive for MRSA (10.0%). All isolates were identical by pulsed-field gel electrophoresis and harboured the staphylococcal cassette chromosome mec (SCCmec) type IV. All colonized and infected individuals were associated with a single room in one of the institutions. MRSA was eradicated from all the colonized and infected subjects. This study shows that it is possible to control an MRSA outbreak in institutions for multi-handicapped children where there is a high degree of physical contact.