Thirty-two newborns with elevated capillary hematocrits >65% were studied. Twenty-two newborns required plasmaexchange transfusion. All had central (venous) hematocrits >65% and had symptoms referrable to complications associated with this syndrome. Of the 22, 15 were appropriate-for-gestational age, 5 were small-for-gestational age, and 2 were large-for-gestational age. Viscosity measurements in the 10 newborns who did not require plasma-exchanges showed increased viscosity in 2 in the slow shear rates associated with bloodflow in the smaller vessels. Coagulation data before and after plasma exchange did not show a hypercoagulable state: PT-14.2±0.7 and 12.9±1.2 secs, PTT 49.9±3.6 and 42.2±3.2 secs, factor VII 73±5 and 78±5%, factor VIII 103±10 and 94±10%, AT III levels were low 14±1.2 and 17±1.3 mg/dl, fibrin degradation products were <10μg/ml, fibrin monomer was not detected, plasminogen levels were 5±0.8 and 7±0.9mg/dl, fibrinogen levels were 203±9.8 and 200±11.8 mg%. Vitamin K dependent factors were reduced factor V 44±6 and 49±11%, factor VII 77±5 and 86±5%, factor IX 28±2 and 42±3%, factor X 35±4 and 62±6%, factor XI 55±5 and 84±9%, factor XII 47±5 and 63±5%. Statistical significant differences were found only with factors IX, X, XI and XII. Thrombocytopenia was present in 6 patients (20% incidence) and post plasma exchange the platelet counts rose significantly and in 2 patients within 3 days reached normal levels. No statistical difference in the platelet counts were noted before and after the plasma-exchange and were similar to the levels determined in 10 newborn controls. Neonatal polycythemia with thrombocytopenia may indicate a more severe disorder, with hematocrits in the 6 patients >70%. It is suggested that the mechanism of the thrombocytopenia may be aggregates of platelets that deaggregate following plasmaexchange. The complications associated with neonatal polycythemia appear related to hyperviscosity, erythrocyte and platelet “sludging” in the smaller vessels.