Fifty babies were born at less than or equal to 37 weeks to mothers with diabetes. Delivery was undertaken in all patients with the reassurance that the L/S ratio was greater than or equal to 2.0 within the preceding 72 h. Five babies (10%) developed respiratory distress syndrome (RDS). Prediction of fetal lung maturity was improved dramatically by measuring amniotic fluid concentrations of phosphatidylcholine (PC), phosphatidylinositol (PI) and phosphatidylglycerol (PG). Fourteen babies were predicted as having 'no surfactant' (PC less than 20 mg/l, PI less than 2 mg/l and PG less than 2 mg/l), five developed RDS. None of the remaining 36 babies developed the illness: they were predicted as having either 'early surfactant' (PC greater than or equal to 20 mg/l, PI greater than or equal to 2 mg/l but PG less than 2 mg/l) or 'late surfactant' (PC greater than or equal to 20 mg/l, PI greater than or equal to 2 mg/l and PG greater than or equal to 2 mg/l). Measurement of PC levels alone was the most was the most accurate method of predicting RDS. There was a significant association between low surfactant phospholipid concentrations and the development of transient tachypnoea of the newborn.