PIP: New findings with important policy implications have revealed that malnutrition in childhood impairs intellectual function in more ways than was previously recognized, but also that some of the damage to the brain caused by malnutrition may be reversed. Early research indicated that malnourished animals lacked the energy to interact with their environment and, thus, performed poorly on tests of mental ability. To determine the effect of poor diet and an impoverished environment on mental development in humans, an extensive follow-up study was made of Guatemalan children who received two different nutritional supplements in a 1969-77 study. Mothers and children in two villages received a high-protein supplement (Atole), and those in two additional villages received a supplement with no protein (Fresco). Both supplements reduced mortality, but Atole villages saw a 69% reduction in infant mortality (vs. 24% in the Fresco villages). The 1988-89 follow-up of 70% of the original participants involved extensive cognitive testing and socioeconomic assessment. Atole subjects performed significantly better on the cognitive tests, and the lowest-income children did as well as their more economically advantaged (but still poor) peers. Those who received Atole exhibited an increased benefit from their years of education and grew up faster and stronger than those who received Fresco. Smaller children who appear younger than their age may receive less stimulation from adult expectations than larger children. These findings indicate that the deleterious effects of early malnutrition on intellectual development can continue into adulthood. Other research has revealed that iron supplements can improve the intellectual and motor abilities of infants. While enriched educational programs can ameliorate some of the problems associated with malnutrition, poor children rarely live where such programs are available. The best and least expensive policy would be to prevent malnutrition among young children who would then be able to take advantage of the money invested in schools for their education.