Background: During hospital stay after birth, preterm infants are susceptible to late-onset sepsis (LOS). Objective: To study the effect of family integrated care in single family rooms (SFRs) compared to standard care in open bay units (OBUs) on LOS. Peripheral or central venous catheters (PVCs/CVCs) and parenteral nutrition (PN) were investigated as potential mediators. Secondary outcomes were length of stay, exclusive breastfeeding at discharge, and weight gain during hospital stay. Methods: Single-center retrospective before-after study with preterm infants admitted ≥3 days. Results: We studied 1,046 infants (468 in SFRs, 578 in OBUs, median gestational age 35 weeks). SFRs were associated with less LOS (adjusted odds ratio (OR) 0.486, 95% confidence interval (CI): 0.293; 0.807, p = 0.005). PVCs (indirect effect −1.757, 95% CI: −2.738; −1.068), CVCs (indirect effect −1.002, 95% CI: −2.481; 0.092), and PN (indirect effect −1.784, 95% CI: −2.688; −1.114) were possible mediators of the effect. PN was the main mediator of the effect of SFRs on LOS. We found shorter length of stay (median length of stay in SFRs 10 days and in OBUs 12 days, adjusted β −0.088, 95% CI: −0.159; −0.016, p = 0.016), but no differences in weight gain or exclusive breastfeeding at discharge. Conclusions: SFRs were associated with decreased incidences of LOS and shorter length of hospital stay. The positive effect of SFRs on LOS was mainly mediated through a decreased use of PN in SFRs. Impact: Family integrated care (FICare) in single family rooms for preterm infants was associated with less late-onset sepsis events during hospital stay and a shorter length of hospital stay after birth.FICare in single family rooms was associated with less use of peripheral or central venous catheters and parenteral nutrition.Mediation analysis provided insights into the mechanisms underlying the effect of FICare in single family rooms on late-onset sepsis and helped explain the differences observed in late-onset sepsis between FICare in single family rooms and open bay units.The reduction in late-onset sepsis in FICare in single family rooms was mediated by a reduced use of intravenous catheters and parenteral nutrition.