In infants of diabetic mothers, congenital anomalies occur about two-three times as often as in normal population. Many etiologic factors have been proposed regarding the mechanism of diabetes related birth defects. The metabolic alterations associated with hyperglycemia include myo-inositol and arachidonic acid deficiency, and as a result disturbed metabolism of prostaglandins. Recent studies provide evidence that a deficiency in prostaglandins adversely affects membranogenesis and membrane function. These changes in membrane function permit the influx of high levels of glucose into the cells, inducing the generation of free oxygen radicals that cause morphologic damage of the embryo, involving aberrant mitochondrial function and enhanced peroxidation of embryonic lipids. The functional deficiency of prostaglandins at a critical time of fetal development can cause embryonic malformations. This paper reviews the role of prostanoids in the development of diabetic embryopathy.