The prevalence and transmission of antimicrobial drug-resistant pneumococci was studied in 48 children attending a day care facility in southern Israel. Nasopharyngeal cultures were obtained every 2 weeks for 10 months, and antibiotic susceptibility of isolates was determined by disk diffusion and E-test. Relatedness of isolates was investigated by capsular typing, ribotyping, and arbitrarily primed polymerase chain reaction. Pneumococci were recovered during 362 (63%) of 573 fortnights, and 219 (60%) of these isolates showed decreased susceptibility to at least one drug; 154 (43%) were intermediately susceptible to penicillin and 51 (14%) were multiresistant. Combining the different typing methods showed that a limited number of clones circulated in the facility. Clones exhibiting decreased antibiotic susceptibility (especially 23F, intermediately susceptible to penicillin and resistant to trimethoprim-sulfamethoxazole, and multiresistant 6B) were more frequently isolated and persisted longer than did fully susceptible clones. By multivariate analysis, carriage of organisms with decreased antibiotic susceptibility was associated with young age, female sex, winter season, and exposure to antimicrobial drugs during the previous month.