Prenatal exposure to drugs, including cocaine, is a significant and preventable cause of developmental disability. Almost two decades after the nation first heard stories of "crack babies," new research has shown that children exposed to cocaine before birth are at risk of learning and behavioral problems. Such problems have broad implications for education, social welfare, and criminal justice in the United States. This report presents an overview of the current state of knowledge regarding the effect of cocaine on the developing brain and offers policy considerations for addressing the issues that arise from cocaine use by pregnant women. Most of the scientific research discussed in the report is derived from a 1997 New York Academy of Sciences conference titled: Cocaine: Effects on the Developing Brain (Harvey and Kosofsky, 1998). The policy considerations developed by the authors are based on this conference and on a series of investigations conducted by researchers at RAND under the leadership of Dr. Gail Zellman. The report is organized around four preventive strategies: primary prevention (preventing substance use before and during pregnancy); secondary prevention (identifying pregnant women who use drugs and minimizing their drug use); tertiary prevention (reducing the adverse consequences of substance exposure on children who were exposed in utero); and, finally, a rationale for making more resources available for women and children affected by cocaine.