Through the use of the in vitro technique of mammalian whole embryo culture, the factors and mechanisms responsible for the increased incidence of congenital malformations among infants of diabetic mothers have been investigated. During early stages of embryogenesis, serum from streptozotocin-induced diabetic rats, hyperglycemia, hypoglycemia, hyperketonemia (β-hydroxybutyrate), and low molecular weight somatomedin inhibitors are teratogenic or growth inhibitory, or both. Furthermore, combinations of these factors interact to increase the risk of a malformation occurring. In contrast, other factors, such as hyperinsulinemia and excess leucine, palmitic acid, and acetoacetate, have little or no teratogenic potential. Mechanisms of action of the factors are varied and may include alterations of arachidonic acid metabolism (hyperglycemia), glycolysis (hypoglycemia), DNA synthesis (β-hydroxybutyrate), and embryonic nutrition (somatomedin inhibitors). The results demonstrate that the origin of the diabetic embryopathy is multifactorial, that many of the congenital defects are induced early in gestation before the diabetic woman may realize she is pregnant, and that insulin therapy reduces the risk.