The nursery presents unique problems for the physician caring for ill newborn infants. The indications for transfusion and the blood banking techniques to provide for these needs have changed significantly in recent years. The decision to transfuse must be based on an understanding of what is known to normally occur with respect to the postnatal decline in hemoglobin and the adaptive mechanisms which exist at this age. Exchange transfusion by increasing oxygen availability at any hemoglobin level may result in a greater than expected decline in hemoglobin. Several blood banking procedures have been developed to provide for the transfusion requirements of the neonate. The walking donor system remains controversial and has created opposition by the American Association of Blood Banks. The use of triple, quadruple, and "cow' pack systems has allowed a greater versatility and better utilization. The concept of frozen red cell transfusions has been extended to the nursery setting with the introduction of "pedi-paks.' These techniques have clearly diminished the risks of transfusion in the neonatal period.