This is the third reported case of discoid lupus erythematosus in a newborn infant, the first reported with a positive L.E. cell test in the infant's blood. The mother had systemic lupus erythematosus. The two previously reported cases and the nine previously reported cases of circulating L.E. cells in newborn infants whose mothers had systemic lupus erythematosus were reviewed. The tentative conclusion is reached that the presence of L.E. cells in the newborn circulation with or without accompanying discoid facial lupus erythematosus is due to the passive placental transfer of the L.E. factor from the mother to the fetus.