Streptozotocin-induced diabetes during pregnancy in rats causes a decrease in primary bile acid pool in neonates. To rule out direct drug effect on the fetus as the basis for this change, studies of bile acid pool and composition at birth and during subsequent development was carried out in neonates of spontaneously diabetic Wistar BB rats and compared to control neonates. The cholic acid pool in neonates of diabetic rats was lower when compared to control neonates at birth. The pool of secondary bile acids was markedly increased in neonates of diabetic rats, with increases in lithocholic and 3 beta,12 alpha-dihydroxycholanoic acid. With age, the cholic acid pool of neonates from diabetic rats was increased and at 3 months of age it was actually higher than in control neonates. The pool of chenodeoxycholic at diabetes onset age was lower in neonates of diabetic rats. HDL-cholesterol was lower in neonates of diabetic rats at 1 week, but this reversed at 3 months of age. These studies firmly establish that neonates of diabetic rats have abnormal bile acid pool and composition at birth which changes to adult diabetic pattern with age.