The world-wide incidence of the fetal alcohol syndrome (FAS) is 1.9 per 1000 live births. Incidence rates vary considerably, however, depending on study site. Mental retardation is a cardinal feature of FAS and is now recognized as the leading known cause of mental retardation in the Western world. Conservatively estimated for the United States, the economic cost associated with FAS-related growth retardation, surgical repair of organic anomalies (e.g. cleft palate, Tetralogy of Fallot), treatment of sensorineural problems, and mental retardation, is +321 million per year. FAS-related mental retardation alone may account for as much as 11% of the annual cost for all mentally retarded institutionalized residents in the United States. Current treatment costs for FAS-related problems are about 100 times federal funding for FAS research necessary to develop cost-effective early identification and prevention strategies.