600 children born to HIV-infected mothers by June 15, 1990, in ten European centres were followed to study the natural history of HIV infection and the vertical transmission rate. They were seen at birth, every 3 months up to 18 months of age, and every 6 months thereafter. At last follow-up, 64 children were judged to be HIV infected and 343 had lost antibody and were presumed uninfected. The initial clinical feature in infected children was usually a combination of persistent lymphadenopathy, splenomegaly, and hepatomegaly, though 30% of children presented with AIDS, or with oral candidosis followed rapidly by AIDS. An estimated 83% of infected children show laboratory or clinical features of HIV infection by 6 months of age. By 12 months, 26% have AIDS and 17% die of HIV-related disease. Subsequently, the disease progresses more slowly and most children remain stable or even improve during the second year. The vertical transmission rate, based on results in 372 children born at least 18 months before the analysis, was 12.9% (95% Cl 9.5-16.3%). Virus has been repeatedly isolated in an additional small proportion of children (2.5%, 95% Cl 0.7-6.3%) who lost maternal antibody and have remained clinically and immunologically normal. Without a definitive virological diagnosis, the monitoring of immunoglobulins, CD4/CD8 ratio, and clinical signs could identify HIV infection in 48% of infected children by 6 months, with a specificity of more than 99%.