The effect of undernutrition on rat small intestine during the critical newborn period was studied. A severe state of protein-energy malnutrition was induced by litter expansion which caused the mean total body weight of experimentally malnourished rats to diminish significantly as compared to control animals. Intestinal weight and total DNA were similarly diminished in the malnourished rats. DNA and protein expressed per gram wet tissue showed no significant differences between groups. Retarded intestinal growth in the malnourished animals was the result of reduced cell number. The mean specific activities of sucrase and maltase were diminished in the experimental group, with mean activities being 20 to 50% of controls, respectively. These differences were larger when expressed as total organ activities. On the other hand, specific lactase activity was significantly higher in undernourished rats but total lactase activity per organ was similar in both groups. Enterokinase specific activity or total organ activity was significantly higher in the undernourished rats.