The concept of designations for hospital facilities that care for newborn infants according to the level of complexity of care provided was first proposed in 1976. Subsequent diversity in the definitions and application of levels of care has complicated facility-based evaluation of clinical outcomes, resource allocation and utilization, and service delivery. We review data supporting the need for uniform nationally applicable definitions and the clinical basis for a proposed classification based on complexity of care. Facilities that provide hospital care for newborn infants should be classified on the basis of functional capabilities, and these facilities should be organized within a regionalized system of perinatal care.