Therapeutic drug monitoring in neonates is challenging but valuable. Neonates have unique drug disposition that makes the use of adult guidelines sometimes inappropriate. This article reviews basic pharmacodynamics, unique neonatal factors, and the clinical applications of these principles. Factors that must be considered include different volumes of distribution, changing renal status, limited hepatic metabolism, and unique drug administration methods. Suggestions for altering drug dosages to achieve therapeutic and/or nontoxic blood concentrations are offered. An awareness of these principles makes drug monitoring in neonates rational and effective.