Previous experimental studies have implicated a genetic component in the induction of malformations in the offspring of diabetic rats. We have compared the outcome of diabetic pregnancy in two outbred (sub)strains of Sprague-Dawley rats (with low incidence [H] and high incidence [U] of skeletal malformations in the offspring) and hybrids between them. The fetuses of diabetic H mothers had no skeletal malformations and the lowest frequency of resorptions (8–9%), regardless of embryo type (H/H or H/U). When the diabetic mother was U or from the hybrid strain (H/U) and the offspring were of the mixed H/U type, we found increased resorption (16–21%) and skeletal malformation (3–5%) rates. If instead the embryos contained a major U genome [either U/U or U/(H/U)], further increased resorptions (23–30%) and skeletal malformations (17–19%) resulted. The H/H and U/U embryonic susceptibility to defined teratogens (3–6 mg/ml D-glucose, 4–8 mM B-hydroxybutyrate) were compared in whole embryo culture and found to be similar, suggesting that the malformations occurring in vivo may have a different etiology than those found in vitro. In the rat model studied, diabetes in the mother appears to cause a disturbance of early stages of embryogenesis in genetically predisposed embryos. This early disturbance results in skeletal malformations and seems to require inducing factor(s) in addition to increased levels of D-glucose and B-hydroxybutyrate. The findings are in concert with the notion of a mixed genetic-environmental etiology of malformations in (diabetic) pregnancy.