Meconium-stained amniotic fluid occurs in approximately 12% of live births. In approximately one third of these infants meconium is present below the vocal cords. However, meconium aspiration syndrome develops in only 2 of every 1000 live-born infants. Ninety-five percent of infants with inhaled meconium clear the lungs spontaneously. Recent investigations have suggested that a reexamination of our assumptions about the etiology of meconium aspiration syndrome is in order. Several authors have provided evidence that support the hypothesis that it is not the inhaled meconium which produces the primary pathologic condition of meconium aspiration syndrome but rather it is fetal asphyxia that is the etiologic agent. Asphyxia in utero produces pulmonary vasospasm and hyperreactivity of the pulmonary vessels. With severe asphyxia the fetal lungs undergo pulmonary vascular damage with pulmonary hypertension. The damaged lungs are then unable to clear the meconium. In the most severe cases there is right-to-left shunting and persistent fetal circulation with subsequent fetal death. The incidence of meconium aspiration may thus be essentially unaffected by current obstetric and pediatric interventions at birth. For the asphyxiated or distressed infant we recommend suctioning at birth and tracheal intubation. In the healthy fetus observation may be sufficient.