We performed a prospective case-control study of bloodstream infections in order to determine the infection rate of Acinetobacter baumannii and to determine the risk factors associated with infection and mortality. Between February 2004 and January 2005, 579 consecutive blood specimens were collected from the two neonatal intensive care units (NICUs) of Al-Nasser and Al-Shifa hospitals in Gaza City. Forty (6.9%) isolates of A. baumannii were obtained from neonates aged under 28 days. Of the patients, 62.5% were male and 37.5% were female. Compared to matched, uninfected controls, statistically significant risk factors were weight<1500 g (odds ratio (OR) 3.89, p<0.001), age <7 days (OR 2.33, p=0.027), median hospitalization of =20 days (OR 3.1, p=0.003), mechanical ventilation (OR 3.5, p=0.001), use of a central venous catheter (CVC; OR 10.5, p<0.001), and prior antibiotic use (OR 4.85, p=0.003). The overall mortality was also significantly different (overall mortality 37.5% in cases vs. 12% in uninfected controls; OR 4.4, p=0.001). Compared to infected controls, statistically significant risk factors were mechanical ventilation (OR 2.68, p=0.008), use of a CVC (OR 6.68, p<0.001), and prior antibiotic use (OR 5.68, p=0.001). The multidrug-resistant type was significantly associated with death in the neonates (p=0.023). The isolates of A. baumannii were resistant to commonly used antibiotics, while susceptible to meropenem (92.5%), imipenem (90%), ciprofloxacin (75%), gentamicin (57.5%), and ceftriaxone (50%). The infection rate with multidrug-resistant A. baumannii is considerable and alarming in NICU infants, and is associated with significant mortality.