Little is known about vertical transmission of hepatitis E virus from infected mothers to their infants. We studied eight babies born to mothers infected with hepatitis E in third trimester. One baby was icteric at birth with elevated transaminases and four babies had anicteric hepatitis. Two babies were born with hypothermia and hypoglycaemia and died within 24 h; one had massive hepatic necrosis. Hepatitis E virus RNA was detected by PCR in cord or birth blood samples of five infants. Six infants had evidence of hepatitis E infection. We conclude that hepatitis E virus is commonly transmitted from infected mothers to their babies with significant perinatal morbidity and mortality.