There is great concern about the health effects of cocaine use during pregnancy. Cocaine alters maternal physiology and crosses the placenta to interact with fetal tissues including the brain. Neurotoxicity, defined as structural and/or functional changes which result in a neurobehavioral deficit, is not unequivocally documented in the human. It is difficult to ascertain duration, intensity and frequency of cocaine exposure in humans as well as the effects of multiple drug use, poor nutrition, lack of prenatal care, lead exposure and infectious diseases. In addition, plasticity of the central nervous system makes the postnatal environment as important as the intrauterine milieu for the developing organism. Animal studies, which allow quantitation of drug exposure and reduction of confounding variables, suggest several possible mechanisms for neurotoxicity induced by cocaine or its active metabolites. The possible mechanisms include: alteration of sodium channel and monoamine transporter development, release of epinephrine from the adrenal medulla with subsequent hyperglycemia, vasoconstriction with subsequent hypoxia and decrease of nutrient supply, calcium ion chelation, superoxide formation or infarction following repeated ischemia and reperfusion, enzyme inhibition, reduced neurotrophic activity, altered gene expression and plasma membrane changes. Alterations in the above parameters may cause acute and reversible effects as well as chronic and permanent effects. Not all alterations in structure and function are deficits, and no single mechanism may explain a given alteration.