Pregnanediol is found in small quantities in the urine of newborn male infants. It disappears from the urine progressively during the first week of life. The smallest amounts of pregnanediol were found in urines of premature infants born to normal mothers. Considerably higher amounts were found in term infants and in premature infants delivered by cesarean section to diabetic mothers treated with progesterone and stilbestrol throughout pregnancy. The difference between premature infants born to normal mothers and premature infants born to progesterone-treated diabetic mothers is interpreted as indicating that parenterally administered progesterone may, under certain circumstances, cross the placental membrane. Evidence that progesterone is elaborated by the fetus, possibly in the adrenal cortex, is discussed, and the hypothesis offered that the placenta may permit the passage of progesterone in either direction.