This is the 7th annual report of the Australian and New Zealand Neonatal Network and presents information on the network's 2001 annual audit of high risk neonates. All level III NICUs in Australia and New Zealand participate in the network's quality assurance measure. In 2001, 6805 babies were born who met the criteria for the Australian and New Zealand Neonatal Network’s (ANZNN) high-risk audit and were admitted to one of the 28 level III neonatal intensive care units (NICUs) throughout Australia and New Zealand. Of these, 3250 babies were born at less than 32 completed weeks gestation and 2791 were born weighing less than 1500 grams. Assisted ventilation (intermittent positive pressure ventilation (IPPV) and/or continuous positive airways pressure (CPAP) was given to a total of 5877 babies. There were 858 babies who received major surgery. Live births for both countries totalled 302193 in 2001 (Australian Bureau of Statistics, 2002; Statistics New Zealand, 2003). This is a decrease from the 313981 babies born in 1995. The ANZNN level III cohort now represents 2.25% of all live births in the two countries.