Methicillin-resistant Staphylococcus aureus (MRSA) is increasingly frequent in both acute care facilities (ACFs) and skilled nursing facilities (SNFs). Admissions to SNFs from ACFs with endemic MRSA are one likely source of infection in SNFs. The occurrence of MRSA in SNFs and the relative roles of ACFs and SNFs in MRSA transmission have not been well characterized. We conducted an epidemiologic investigation in an SNF reporting a high incidence of MRSA cases and found that the prevalence of MRSA exceeded that reported in acute care settings. Fifteen (9.1%) of the 164 residents were colonized or infected with MRSA. Risk factors for MRSA identified through a prevalence case-control study were nasogastric intubation (odds ratio = 5.5; 95% confidence interval = 1.2, 26.4), antibiotic therapy (OR= 3.9; CI = 1.2, 13.0), and hospitalization in an acute care facility within the previous six months (OR = 2.9; CI = 0.9, 9.7). During a three-month period, 6 of 100 new admissions were MRSA-positive; all positive patients were from ACFs. Five new cases also emerged from previously MRSA-negative residents. SNF residents are often discharged to ACFs. Transmission of MRSA within the SNF and the transfer of patients to ACFs increases the reservoir of potentially infective patients and the potential for MRSA infections in ACFs. Modest control measures, including targeted surveillance culturing and cohorting of colonized residents, may minimize MRSA transmission in the SNF and decrease the reservoir of MRSA in the community.