The comprehension of fluid and electrolyte and acid-base homeostasis is essential for the nurse caring for critically-ill neonates. This article discusses the means by which the kidney regulates fluid, sodium, and potassium, and its role in acid-base regulation. Under normal circumstances, the neonatal kidney is able to maintain homeostasis in these areas. However, the more premature an infant, the less able they are to maintain normal electrolyte, bicarbonate, or fluid balance. The understanding of renal filtration, absorption, and excretion requires knowledge of renal anatomy and the structure and function of the nephron unit. Regulation of glomerular filtration and renal blood flow plays an important part in determining the kidney's ability to maintain homeostasis (see Part I). Perhaps the greatest factor in determining renal function is the degree of maturity. Nephrogenesis is not complete until the 34th week of gestation. This, along with other factors, has a profound effect on glomerular filtration, renal filtration and absorption, and the nephron's sensitivity to hormonal control. The structural and functional differences in the neonatal kidney must be considered when evaluating renal function and devising a plan of care.