Febrile infants are frequently hospitalized for possible serious bacterial illness (SBI). Potential to replace hospitalization of selected febrile infants with care in alternative settings was assessed by estimating risk for deterioration and by determining resource use. Lower and upper bound estimates for the number of infants admitted to a tertiary care hospital from 1994 to 1998 for possible SBI were 537 and 836, respectively. Detailed record reviews were conducted for febrile infants among this group, who, on the basis of positive blood or cerebrospinal cultures, were considered most likely to have SBI. No infant with a positive blood culture who was eligible for alternative setting care (ASC) deteriorated. Ninety-five percent confidence interval for the worst-case (assuming denominator of 537) estimate of risk for deterioration was 0% to 0.56%. Most resource use was compatible with ASC. Alternative setting care for selected febrile infants is both safe and feasible.