Pseudomonas cepacia was recovered from the blood cultures of 52 patients in four hospitals in New York over 6 months from April through October 1980. Epidemiologic investigation in one hospital indicated that the positive results of blood culture represented pseudobacteremias and implicated a 10% povidone-iodine solution used as an antiseptic and disinfectant (Pharmadine; Sherwood Pharmaceutical Company, Mahwah, New Jersey) as the source of contamination. Physicians who drew blood cultures positive for P. cepacia were more likely to have left povidone-iodine on the skin before venipuncture (p = 0.026) and were more likely to have applied povidone-iodine to the blood culture bottle tops and to have left it there while inoculating the blood culture media (p = 0.007) than those who drew cultures negative for P. cepacia. Direct inoculation of Pharmadine into brain-heart infusion broth yielded P. cepacia; however, 2 weeks after the first cultures, the same Pharmadine bottles were culture negative. The iodine concentrations of the contaminated Pharmadine solutions were similar to those of 10% povidone-iodine solutions distributed by other manufacturers.