During 1988-1989, 35 California counties reported that 6,358 substance-exposed newborns were referred to county child welfare services. An estimated 72,000 babies were born in California in 1988 with prenatal exposure to drugs, including alcohol. Only 11 percent of drug-exposed infants were reported to social service agencies, and most counties reported they had difficulty finding suitable care for the infants. Appropriate policies are needed to provide education about the use of drugs during pregnancy and health and social services for both mothers and infants. The California legislature is currently evaluating several bills that propose prevention and intervention services for pregnant women, mothers, and children who have been affected by alcohol and other drugs. Already, the Perinatal Substance Abuse Services Act of 1990 provides for developing a comprehensive continuum of substance abuse treatment, care, and services at the local level. Policies should consider the economic impact of drug-exposed infants and the infrastructure of participating agencies. Interagency policies should include uniform criteria for health care workers, social service agencies, and educators; consistent guidelines governing the exchange of information among a range of agencies, including hospitals and schools; and increased prevention and early intervention services for infants and their families. 15 references