To estimate the effect of maternal illicit and prescription drug use on neonates in Washington State between 2000 and 2008. We used state-linked birth certificate and hospital discharge (mother and neonate) data to calculate prenatal drug exposure and neonatal abstinence syndrome rates, and compared state neonatal abstinence syndrome rates with national-level data from the Nationwide Inpatient Sample. We identified the drugs of exposure, examined predictors of drug exposure and neonatal abstinence syndrome, and assessed perinatal outcomes among drug-exposed and neonatal abstinence syndrome-diagnosed neonates compared with unexposed neonates. Drug exposure and neonatal abstinence syndrome rates increased significantly between 2000 and 2008, neonatal abstinence syndrome rates being consistently higher than national figures (3.3 compared with 2.8 per 1,000 births in 2008; P<.05). The proportion of neonatal abstinence syndrome-diagnosed neonates exposed prenatally to opioids increased from 26.4% in 2000 to 41.7% in 2008 (P<.05). Compared with unexposed neonates, drug-exposed and neonatal abstinence syndrome-diagnosed neonates had a lower mean birth weight, longer birth hospitalization, were more likely to be born preterm, experience feeding problems, and have respiratory conditions (all P<.001). Maternal use of illicit and prescription drugs was associated with considerable neonatal morbidity and significantly higher rates of drug exposure and neonatal abstinence syndrome in recent years. Data suggest that opioid analgesics contributed to the increase in prenatal drug exposure and neonatal abstinence syndrome in Washington State. In accordance with current guidelines, our findings emphasize the need for clinicians to screen pregnant women for illicit and prescription drug use and minimize use of opioid analgesics during pregnancy. II.