Strict hygiene controls have been put in place in the maternity and neo-natal ward at a Bedfordshire hospital.
Two babies and a mother have been infected with staphylococcus aureus at the Luton and Dunstable Hospital.
The bacteria is commonly carried by a quarter of the population on their skin, the hospital said.
The hospital is taking measures to contain the outbreak, the affected babies are in isolation care and the wards are not accepting transfers.
Tests have also been carried out on other babies on the ward and the infection has been found on the skin of two other children.
All five patients are expected to make a full recovery and the two children originally found with the condition have been given antibiotics.
Dr Sarah Skinner, clinical director at the hospital, said: "We are confident that we have this under control with effective control measures that we have put in place.
"We are not expecting more babies with the infection.
"With babies, their immune system is not as good as with bigger children or adults so we look very carefully for signs of infection and that is what we have done on this occasion."
Staff are working closely with the Health Protection Agency.
The Luton and Dunstable NHS Trust said the infection was treatable but the bacteria could lead to infection.