The predictive value of cord blood IgE in the development of atopic disease was evaluated in a prospective study of two groups of infants. Total serum IgE level was ≥ 0.7 U/ml in 44.3% of the infants with positive family history of atopy and in 16.0% among those with negative family history. The level of cord blood IgE correlated significantly with the subsequent development of atopic disease in both groups. Cord blood IgE higher than 0.7 U/ml was associated with a high risk of development of atopic eczema and wheezing, 52.8% and 58.8% respectively in the groups with or without family history of atopy; compared with 13.4% and 1.1% in the groups with IgE levels less than 0.7 U/ml. Among newborns fed exclusively on breast milk for a minimum of 3 months, the incidence of eczema and wheezing was significantly lower (12%) compared with findings in the formula-fed group (32%).