A simplified test for endotoxemia was evaluated in parallel with 198 blood cultures from 115 neonates requiring transitional or intensive care. The Limulus assay disclosed endotoxemia in seven of eight patients with gram-negative bacteremia tested on one or two occasions. It was not specific for bacteremia, especially during the first week of life, when 37 of 112 tests from nonbacteremic infants (33%) were positive. In older infants, positive tests were obtained in only ten of 55 without bacteremia (18%) (P less than 0.07), six of whom had necrotizing enterocolitis as the likely source of endotoxemia. Gram-negative bacteremia existed in 5% of infants (two of 39) less than or equal to 7 days with positive tests and in 37% of older infants (six of 16) (P less than 0.01). Endotoxemia appears to be frequent among infants appearing to have sepsis and may contribute to neonatal morbidity. The Limulus assay may be a useful diagnostic test for coliform bacteremia and necrotizing enterocolitis beyond the first week of life.