Two studies were aimed at developing the auditory steady-state response (ASSR) for universal newborn hearing screening. First, neonates who had passed auditory brainstem response, transient evoked otoacoustic emission, and distortion-product otoacoustic emission tests were also tested with ASSRs using modulated tones that varied in frequency and level. Pass rates were highest (> 90%) for amplitude-modulated tones presented at levels ≥ 69 dB SPL. The effect of modulation frequency on ASSR for 500- and 2000-Hz tones was evaluated in full-term and premature infants in the second study. Full-term infants had higher pass rates for 2000-Hz tones amplitude modulated at 74 to 106 Hz compared with pass rates for a 500-Hz tone modulated at 58 to 90 Hz. Premature infants had lower pass rates than full-term infants for both carrier frequencies. Systematic investigation of ASSR threshold and the effect of modulation frequency in neonates is needed to adapt the technique for screening.