We evaluated risk factors for neonatal hip instability (NHI) at birth using ultrasonography and assessed the reliability of our ultrasound method by means of an interobserver study. The hips of 4,459 newborns were examined by ultrasound from 1988 to 1990. The ultrasound evaluation was based mainly on measurement of femoral head coverage (FHC) by the bony acetabular roof. The mean FHC was 56% in boys and 54% in girls (a significant difference). Fifty-five newborns with unstable hips had a mean FHC of 37%, which was significantly lower than that of the normal hips. Known risk factors for NHI were confirmed (breech position, family history of hip dysplasia, increased birth weight), but no new risk factors were detected. The interobserver study included 200 hips. The 95% confidence limit for interobserver variation in FHC (+/- 2 SD) was +/- 8%. Because of this moderate interobserver variation, and because the incidence of late-detected hip dysplasia was low (0.2 per 1,000), we conclude that our method for ultrasound examination is sufficiently reliable for screening of hips in newborns.