Congenital malformations convey a major financial and social burden to society. Epidemiologic, clinical, and animal studies indicate that these malformations occur in early pregnancy, are influenced by an aberrant metabolic fuel milieu, and seem to result from a combination of more than one factor acting synchronously. Unfortunately, during the critical period of organogenesis, the pregnancy is hardly recognizable, making evaluation and study of relevant maternal embryonic parameters extremely difficult. Additionally, there are obvious limitations to human study for technical and ethical reasons. Animal experimentation, however, has demonstrated that these malformations can be produced in many vertebrates and are similar to those seen in humans. The mechanism for induction of dysmorphogenesis in experimental diabetic pregnancy has been shown to include generation of free oxygen radicals and are associated with alterations in the embryonic levels of arachidonic acid, prostaglandins, and myo-inositol. Most of the earlier experimental studies focused on defects at the level of the embryo excluding the extraembryonic membranes. Current investigations provide evidence that the yolk sac has an integral role in diabetic embryopathy. The experimental use of several different compounds, such as arachidonic acid, myo-inositol, and antioxidants, offers significant promise for the future in possibly serving as a pharmacologic prophylaxis against diabetic embryopathy.