Both insulin and the related peptides, the insulin-like growth factors/somatomedins, may function as anabolic factors in the regulation of fetal body size. Infants born to women suffering from diabetes mellitus may show increased deposition of subcutaneous fat and enhanced lean body mass, findings reproduced in experimental animal fetuses with induced hyperinsulinaemia. Fetal adiposity may be associated with a life-time tendency to obesity and its associated diseases. Insulin-like growth factors I (IGFI) and II are present in the circulation of the newborn infant and animal fetus and correlate positively with birth size. The fetal tissues are biologically responsive to IGFs in vitro and are rich in specific cell membrane receptors, those predominantly recognizing IGFI being structurally and functionally similar to the insulin receptor. Insulin could theoretically influence fetal tissues by an interaction with either the insulin or IGF receptor. IGF release is a property of multiple fetal tissues in vitro, but, in contrast to postnatal life, is not dependent on growth hormone. Fetal IGF production may be influenced by placental lactogen, especially IGFII which rapidly declines in the circulation following parturition in the rat and sheep. A positive association also exists between circulating levels of insulin and IGFs when the former is experimentally manipulated in the animal fetus. Similarly the infant born with transient diabetes mellitus has low cord blood levels of insulin and IGFI. Insulin has a dual role in prenatal life. In the last trimester insulin functions as a glucoregulatory hormone, but from much earlier in gestation creates an anabolic environment in the fetus supplied with optimal nutrients. This latter mechanism of action is unclear and probably heterogeneous, but in overview is permissive rather than obligatory. In contrast the growth-promoting role of the IGFs is direct but their interaction with fetal tissues, and thus the overall emphasis of fetal growth, may be paracrine.