Objective: To assess cortisol concentrations in cord blood and investigate their relationships with the IGF system. Study design: Fifteen newborns with birth weight appropriate for gestational age (AGA) and 30 children with intrauterine growth retardation (IUGR) were studied. Serum samples were collected from umbilical cord blood and cortisol, IGF-I and IGF-binding proteins (IGFBPs)-1 and -3 were measured. IUGR infants were followed up for 3 months with repeated measurements of weight, supine length and knee-heel length (by knemometry). Results: IUGR newborns showed significantly greater concentrations of IGFBP-1 (P<0·0001) and lower concentrations of IGF-I (P < 0.0001) and IGFBP-3 (P < 0.0001) than did controls. In AGA children, cortisol correlated inversely with IGF-I (r ¼ ¹0.75, P < 0.002) and directly with IGFBP-1 (r ¼ 0.52, P < 0·05), whereas no correlation between cortisol and IGF system-related variables was observed in IUGR. Finally, in IUGR children an inverse correlation was found between length gain in the first trimester of life and cortisol concentrations at birth (r ¼ ¹0.54, P < 0.005). Conclusions: Cortisol might be a physiological regulator of fetal growth, at least in the last part of pregnancy, by modulating IGF-I and IGFBP-1 release under conditions of fetal stress. In IUGR children, a rearrangement of this growth control mechanism seems to occur. The close inverse relationship of cortisol with linear growth, if confirmed by large-scale studies, suggests cord blood cortisol to be potentially predictive of early postnatal catch-up growth in IUGR infants.