This policy brief addresses the current and future impact of substance abuse by pregnant women on their infants and children. It provides data on incidence estimates in 1985, 1989, 1995, and 2000. Findings of studies in Alabama, Florida, Georgia, Mississippi, North Carolina, and South Carolina provide documentation for varying incidence estimates. Common consequences of maternal substance abuse are identified and documented, including low birthweight (and its attendant educational implications) and greater numbers of infants and children in the foster care system. A chart lists 10 key obstacles to serving these children, identified in a recent study. These include inconsistent identification practices and absence of a community wide case tracking system, narrowly defined eligibility criteria for developmental services, and the precarious state of child welfare systems. Principles on which to base policy in this area are suggested, focusing on the importance of family centered interventions, the diversity of the drug exposed population, and the need for greater teacher involvement. Specific suggestions are then given for policymakers at three levels: (1) the national level (e.g., increase investments in prenatal and early childhood health care programs); (2) the state level (e.g., establish demonstration preschool programs; and (3) the local level (e.g., provide families with training in parenting, stress management, and nutrition). (Contains 18 references.) (DB)