We present near (ground-based) and far (ISO) infrared spectroscopy of Sakurai's object. As in the case of the optical spectrum, between 1996 and 1997 April the near-infrared spectrum underwent a dramatic change to later spectral type, and there is some evidence that the spectrum continued to evolve during 1997. Molecular features of carbon-bearing molecules (CN, C2, CO) — corresponding to those seen in cool carbon stars — are now prominent in the 1–2.5 μ m range, and the 12C/13C ratio is low. The ISO data demonstrate the presence of hot circumstellar dust at a temperature of ∼ 680 K. If the dust shell is optically thin, the dust mass is ∼ 2.8 × 10−8 M⊙.