Failure to recognize esophageal intubation can result in severe hypoxia and permanent neurologic injury. Capnography is a standard monitoring modality in the operating room but has not been utilized fully in other environments. We used capnography at the time of endotracheal intubation in the neonatal intensive care unit (NICU) to determine whether capnography could more quickly and accurately identify endotracheal tube position than other clinical indicators of endotracheal tube position. One hundred intubation episodes were studied in 55 neonates. Capnograms were obtained 15 and 120 sec following tube placement. Intubating personnel were blinded to the capnographic data and determined endotracheal tube location (trachea vs. esophagus) by clinical criteria only. The sensitivity and specificity of capnography and clinical examination for identification of tube position were analyzed, and the time required for establishing by clinical confirmation whether the tube was in the trachea or not was compared to that required for capnography. Forty of 100 intubation attempts resulted in esophageal intubation. Capnography correctly identified these errant tube placements in 39 of 40 instances and did so in 1.6 sec (SD +/- 2.4). Capnography failed to identify successful endotracheal intubation on only one occasion. Clinical indicators of tube position required 97.1 sec (SD +/- 92.6) to identify an esophageal intubation and failed to identify successful endotracheal intubation in 5 of 60 cases. We conclude that capnography is a valuable adjunct to clinical examination to demonstrate whether an endotracheal tube is placed correctly in the trachea of neonates in the NICU.