The immune competency of peripheral blood (cord) lymphocytes of newborn infants was investigated in vitro. Number of T [thymus-derived] cells was enumerated by E[erythrocyte]-rosette formation and a cytotoxicity assay by using an anti-human-thymocyte antiserum. Lymphokine production as an indicator of T cell function was evaluated by leukocyte migration inhibition factor production following stimulation with various mitogens, and viral and immune interferon production in response to stimulation with polyriboinosinic-cytidilic acid and phytohemagglutinin, respectively. Ability to respond to mitogens was tested by 3H-thymidine uptake into DNA, and by measuring the early synthesis of protein by lymphocytes by 3H-leucine uptake. Lymphocyte cyclic[c]AMP levels in resting cells and after trypsin treatment was used as a test of cellular competency. Total B [bone marrow-derived] cells was evaluated by EAC[erythrocyte-antibody-complement]-rosette formation. Class specific surface membrane immunoglobulin-bearing cells were assayed by the peroxidase immunoenzymatic method. Normal children and adults served as controls. No significant differences in immune competency could be shown between newborns and older people except for lymphocyte cAMP levels which were lower in the newborns, in resting and in stimulated cells. The relationship between this latter finding and the immune status is as yet not clear. Neonatal lymphocytes are apparently essentially immunocompetent, with the expression of their immune capabilities in vivo becoming apparent only after encounter with environmental antigenic stimuli.