Polychlorinated biphenyls (PCB) produced ultrastructural lesions of thyroid follicular cells and a reduction in serum levels of thyroid hormones in neonatal (0, 7, 14, and 21 days of age) Osborne-Mendel rats exposed to 50 or 500 ppm PCB in utero and by the milk. Litter size was decreased significantly in rats fed 500 ppm PCB. Body weights at 21 days of age were reduced in rats exposed to 50 and 500 ppm PCB. The ultrastructural lesions in follicular cells were dose- and age-dependent but were less extensive than in adult rats of the same strain. At all ages the lesions in thyroid follicular cells were characterized by increased development of rough endoplasmic reticulum and vacuolization of mitochondria. There was an increase of colloid droplets and lysosomes in the older age groups (14 and 21 days) but little evidence for colloid droplet-lysosome interaction necessary for the secretion of thyroid hormones. Shortening of microvilli, with the formation of club-shaped or branching forms, was observed only in 21-day-old rat pups. These ultrastructural alterations in follicular cells exposed to PCB were associated with a significant reduction in serum thyroxine in the rats at birth and at 7, 14, and 21 days of age. Serum triiodothyronine was reduced significantly in 7- and 14-day-old rat pups. The ultrastructural alterations in follicular cells appeared to contribute to the significant lowering of serum thyroid hormone levels in 14- and 21-day-old rats exposed to PCB. These findings suggest that alterations in thyroid structure and function may be important in the pathogenesis of certain metabolic disorders associated with PCB intoxication.