Environmental contamination of drinking water has been observed for perchlorate, a chemical able to affect thyroid function. This study examines whether that exposure affected the thyroid function of newborns. Neonatal blood thyroxine (T4) levels for days 1 to 4 of life were compared for newborns from the city of Las Vegas, Nevada, which has perchlorate in its drinking water, and those from the city of Reno, Nevada, which does not (detection limit, 4 micrograms/L [ppb]). This study is based on blood T4 analyses from more than 23,000 newborns in these two cities during the period April 1998 through June 1999. No difference was found in the mean blood T4 levels of the newborns from these two cities. Drinking water perchlorate levels measured monthly for Las Vegas ranged during this study period from non-detectable for 8 months to levels of 9 to 15 ppb for 7 months. Temporal differences in mean T4 level were noted in both cities but were unrelated to the perchlorate exposure. This study was sufficiently sensitive to detect the effects of gender, birth weight, and the day of life on which the blood sample was taken on the neonatal T4 level, but it detected no effect from environmental exposures to perchlorate that ranged up to 15 micrograms/L (ppb).