The measurement of fatty acid ethyl esters (FAEE) in neonatal meconium is a novel test to confirm prenatal ethanol exposure. The origin of FAEE in the maternal-placental-fetal unit is not known. The objectives of this study were to investigate whether FAEE are transferred and metabolized by the human placenta. Isolated placental cotyledons were perfused with a mixture of four FAEE (palmitic, stearic, oleic, and linoleic acid ethyl esters) commonly detected in the meconium of neonates exposed to ethanol in utero, and the transfer of FAEE to the fetal unit was investigated in the absence and presence of albumin. The metabolic degradation of FAEE by human placental microsomes was subsequently determined. FAEE disappeared from the maternal circulation but remained undetectable in the fetal unit following perfusions. The addition of albumin had no effect on FAEE transfer. The unrecoverable fraction of individual FAEE in the perfusion system accounted for Ͼ50% of the initial amount used, suggesting significant metabolic degradation. Subcellular studies documented the enzymatic degradation of FAEE by placental microsomes (mean K m , 35-95 M; V max , 0.6 -1.8 nmol/min/mg for individual FAEE). FAEE at levels found in alcoholics that are originated from the mother are not transferred to the fetus because they are taken up and degraded extensively by the human placenta. Hence, FAEE detected in neonatal matrices are likely produced by the fetus from ethanol that has been transferred to and metabolized by the fetus, rendering FAEE a powerful direct biomarker reflective of true fetal exposure to ethanol in utero.Consumption of alcohol during pregnancy is the cause of Fetal Alcohol Spectrum Disorder (FASD), which affects approximately 1% of all live births (Sampson et al., 1997). According to the current diagnostic guidelines (U.S. Institute of Medicine, 1996), except when the pathognomonic craniofacial dysmorphology is present, FASD can only be diagnosed with confirmed maternal drinking history, which is often difficult to obtain. As a result, large numbers of affected children cannot be properly diagnosed and receive appropriate interventions in early childhood, although studies have shown that early intervention leads to better prognosis of FASD (Streissguth et al., 1996).Fatty acid ethyl esters (FAEE) are nonoxidative metabolites of ethanol. The production of FAEE from ethanol and its substrates, fatty acyl CoA or free fatty acids, is facilitated by cytosolic and microsomal fatty acid ethyl ester synthases (Best and Laposata, 2003). FAEE have been proposed as biological markers of acute and chronic alcohol consumption (Laposata, 1999) because they have been reported to accumulate at high levels in the blood of adult drinkers (Doyle et al., 1996) and in critical organs most commonly affected by chronic alcoholism (Laposata and Lange, 1986). Recently, significantly elevated levels of FAEE have been documented in the meconium of neonates of mothers who had used alcohol heavily in pregnancy (Bearer et al., 1999(Bearer ...