This is a Phase 2, open label, multi-center, randomized trial to determine the safety and efficacy of mupirocin in eradicating colonization with Staphylococcus aureus (SA) and preventing the occurrence of invasive and other clinically significant SA infections among critically ill infants in the ICU. Infants hospitalized in an ICU at any one of the 6 participating centers with a positive nasal culture for SA will be eligible to enroll. Infants will be stratified by birth gestational age (\< 28 weeks and \<8 weeks of post-natal life or \> /= 28 weeks / \< 28 weeks and \> /=8 weeks of post-natal life) and colonizing strain methicillin-resistant Staphylococcus aureus (MRSA) or methicillin-sensitive Staphylococcus aureus (MSSA) and then randomized 1:1 to receive a 5 day course of mupirocin applied to the nares, umbilicus and perianal (NUP) areas every 8 hours (± 2 hours) vs. no treatment. (Stratification by birth gestational age is performed to minimize bias that could result from a higher risk for developing infection due to prematurity or prolonged length of stay due to prematurity.) The primary objectives of this study are to 1) evaluate the safety and clinical acceptability of a 5-day course of mupirocin applied every 8 hours (± 2 hours) to the nares, umbilical and perianal areas of infants residing in the ICU 2) to examine the efficacy of mupirocin in eradicating SA colonization of infants in the ICU, defined as the absence of SA in cultures of the nares, umbilical, and perianal areas on day 8 (± 2) (primary decolonization) 3) to examine the efficacy of mupirocin in achieving persistent eradication of SA colonization among infants residing in the ICU, defined as the absence of SA in cultures of the nares, umbilical, and perianal areas on days 8 (±2) and 22 (±2) (persistent decolonization). The secondary objectives of this study are to 1) To examine the efficacy of mupirocin in preventing clinical SA infection during days 1-22 or until discharge, whichever occurs first, among SA colonized infants who are residing in the ICU 2) To compare time until SA decolonization between the mupirocin and placebo groups: Time from Day 1 until the first NUP collection with no SA is detected in the nares, umbilical, and perianal areas 3) To examine whether mupirocin affects the frequency of non-SA clinical infections by comparing the frequency of these infections in the treatment and control groups during the 85 day observation period 4) To examine whether mupirocin affects the frequency of severe (stage II-III) necrotizing enterocolitis by comparing the frequency of occurrence in the treatment and control groups during the 85 day observation period.

Each participant will be enrolled for up to 12 weeks (Day 85) or until the time of discharge from the hospital, death or withdrawal from further participation, whichever occurs first. It is anticipated that it will take at least 2 years to enroll all participants. Study duration is 36 months. Enrolled infants will continue to receive medical care as they otherwise would if they were not enrolled in the trial. The study will be powered toward the primary endpoint with 126 participants. Enrollment may continue up to a maximum of 500 participants to inform the secondary and exploratory endpoints and to help design any subsequent study.