Maternal diabetes develops in 2-6% of total pregnancies, depending on geographical and ethnic background. About 10% of fetuses from diabetic pregnancy display congenital malformations in various organ systems including cardiovascular, gastrointestinal, genitourinary and neurological systems, among which the neural tube defects (NTDs) such as anencephaly, holoprosencephaly and syntelencephaly were more frequently demonstrated. Recent studies by the Diabetes Control and Complications Trial Research Group show that tight glycemic control early in pregnancy decreases the progression of a number of diabetic complications. However, it appears that the pre-existing tissue damage cannot be reversed even after normoglycemic levels are achieved during pregnancy. In recent years, considerable efforts have been made to investigate the etiology of birth defects among infants of diabetic mothers. It has been shown that diabetes-induced fetal abnormalities are accompanied by some metabolic disturbances including elevated superoxide dismutase (SOD) activity, reduced levels of myoinositol and arachidonic acid and inhibition of the pentose phosphate shunt pathway. Moreover, the frequency of fetal malformations in diabetic pregnancy has been reported to be markedly reduced by dietary supplements of antioxidants such as vitamin E, vitamin C and butylated hydroxytoluene, suggesting that oxidative stress is involved in the etiology of fetal dysmorphogenesis. Furthermore, several experimental studies have shown that NTDs in embryos of diabetic mice are associated with altered expression of genes, which control development of the neural tube. In this review, recent findings of possible molecular mechanisms which cause morphological changes during neural tube development in embryos of diabetic pregnancy are discussed.