OBJECTIVE To establish the incidence and severity of congenital and neonatal varicella in Australia. METHODOLOGY Demographic and clinical details were obtained by postal questionnaire regarding cases notified to the Australian Paediatric Surveillance Unit by over 930 participating clinicians in 1995-97 inclusive. RESULTS Seven cases of congenital varicella (1: 107 000 pregnancies/year) followed maternal infection at 8-26 weeks: five had defects, two did not. Four of the seven infants with congenital varicella developed herpes zoster in the first 15 months of life. Forty-four infants had neonatal varicella (1: 17 000 pregnancies/year). CONCLUSION : There is an ongoing, albeit low, incidence of congenital and neonatal varicella in Australia.