OBJECTIVE To compare the correlation between fetal insulin production (as estimated by amniotic fluid [AF] C-peptide concentration) and neonatal body fat (as estimated by both anthropometrics and total body electrical conductivity) with that between fetal insulin production and birth weight or fat-free mass. METHODS Amniotic fluid C-peptide concentration measured within 1 week of delivery was correlated with birth weight and neonatal body composition, estimated by both anthropometric measures and total body electrical conductivity within 24 hours of birth. Eighteen term neonates were studied: 13 from pregnancies complicated by diabetes and five from mothers with normal glucose tolerance. RESULTS Six infants were large for gestational age and 12 were appropriate for gestational age. There was a significant correlation between AF C-peptide level and neonatal fat mass, estimated by either anthropometric measures (r = 0.72, P = .0008) or total body electrical conductivity (r = 0.61, P = .008) methodology. The correlation was weaker between AF C-peptide level and either ponderal index (r = 0.44, P = .064) or total weight (r = 0.39, P = .11). The correlation with fat-free mass estimated by either method was not statistically significant. CONCLUSIONS Our results suggest that fetal insulin production, as estimated by AF C-peptide concentration, influences fetal growth primarily through increasing fetal fat deposition rather than lean body mass.