<jats:title>Abstract</jats:title> <jats:sec> <jats:title>Background</jats:title> <jats:p>Infections caused by extended-spectrum β-lactamase–producing Enterobacterales (ESBL-E) among hospitalized neonates in sub-Saharan Africa pose significant clinical challenges. Data on prevalence and acquisition of ESBL-E carriage among hospitalized neonates in the region are few, and risk factors for transmission are not clearly defined.</jats:p> </jats:sec> <jats:sec> <jats:title>Methods</jats:title> <jats:p>In a cohort study of consecutive neonatal admissions to Kilifi County Hospital from July 2013 through August 2014, we estimated ESBL-E carriage prevalence on admission using rectal swab cultures and identified risk factors using logistic regression. Using twice-weekly follow-up swabs, we estimated the incidence and identified risk factors for ESBL-E acquisition in hospital using Poisson regression.</jats:p> </jats:sec> <jats:sec> <jats:title>Results</jats:title> <jats:p>The prevalence of ESBL-E carriage at admission was 10% (59/569). Cesarean delivery, older neonatal age, and smaller household size were significant risk factors. Of the 510 infants admitted without ESBL-E carriage, 238 (55%) acquired carriage during their hospital stay. The incidence of acquisition was 21.4% (95% confidence interval, 19.0%–24.0%) per day. The rate was positively associated with the number of known neonatal ESBL-E carriers and with the total number of neonates on the same ward.</jats:p> </jats:sec> <jats:sec> <jats:title>Conclusions</jats:title> <jats:p>Carriage of ESBL-E was common among neonates on admission, and in-hospital acquisition was rapid. The dissemination and selection of ESBL-E appears to be driven by hospital exposures, operative delivery, and neonatal ward patient density. Further attention to infection control, patient crowding, and carriage surveillance is warranted.</jats:p> </jats:sec>