Investigators found melamine in the urine and kidney stones of the sick babies, Xinhua said, citing a government investigation team.
Lu Yuan, a urologist with the No. 1 Hospital of the Chinese People's Liberation Army, said 14 sick babies were brought into her facility in Lanzhou, capital of Gansu province.
"Most of the babies looked worn-out and had a fever when they arrived at the hospital," she said. "Some didn't produce any urine for two to three days and were in very serious condition."
The case is the second involving harmful baby formula in China in recent years. In 2004, more than 200 Chinese infants suffered malnutrition and at least 12 died after being fed contaminated formula.
In US Food and Drug Administration warned consumers to avoid Chinese infant formula, although a New Zealand dairy cooperative that owns part of Sanlu said it believed no tainted powder was exported from China.
Sanlu, based in Shijiazhuang, a city southwest of Beijing, buys milk from suppliers that include 60,000 farming households, according to its website.
The company has 18 percent of China's market for milk powder, and produces 6,800 tons of milk a day.
