A predominantly hospital-based outbreak of multiply-resistant Klebsiella pneumoniae capsular type K2 (MRK) expressing expanded spectrum betalactamase (ESBL) activity and fully sensitive only to the carbapenems and amikacin is described. The organism was isolated from 283 patients between March 1992 and September 1995. The outbreak started in the intensive care unit (ICU) of a major acute hospital and spread through surgical wards, a medical ward, a geriatric unit in a separate hospital and various other local hospitals. Environmental screening revealed extensive ward contamination. The decline of the outbreak after the spring of 1995 coincided with the re-emphasis of standard infection control procedures and the launch of a works programme aimed at addressing underlying sites of environmental contamination. Of the 283 cases, 166 (59.0%) were detected through a specially instigated case finding programme. The MRK caused 11 cases of septicaemia, two postoperative intra-abdominal abscesses, one case of postoperative meningitis, 102 cases of urinary tract infection and 28 wound infections and was isolated from the respiratory tracts of five patients with ventilator associated pneumonia. The difficulty in controlling the outbreak is ascribed to heavy environmental contamination, frequent inter- and intra-hospital patient transfers and prolonged carriage of the outbreak strain.