In an attempt to study the diagnostic value of .alpha.-fetoprotein (AFP), serum AFP concentrations were measured by radioimmunoassay in 34 neonates and infants with obstructive hepatobiliary diseases and the results were compared with the normal ranges of AFP at this age. Eighteen of 24 infants with biliary atresia and 4 of 6 infants with neonatal hepatitis had raised AFP values. In only 1 of 4 infants with choledochal cyst did the AFP value exceed normal. In 10 older children with this lesion, AFP was normal. Serum AFP concentrations in biliary atresia did not correlate with the serum bilirubin, s-GOT [glutamic axaloacetic transaminase], s-GPT [glutamic pyruvic transaminase], anatomic type of the lesion or post-operative bile flow. The elevation of AFP in infantile cholestasis apparently is unrelated to underlying disease except in the case of .alpha.1-antitrypsin deficiency. Serum AFP concentrations in neonates with physiological jaundice were seldom elevated and showed a good correlation with serum levels of total bilirubin. Possible mechanisms causing this elevation of AFP may be different from those involved in infantile cholestasis.