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To examine recent evidence on the efficacy of antifungal prophylaxis to prevent neonatal systemic fungal infection. The review also aims to examine other relevant data, including the incidence of fungal infection, adverse effects of antifungal therapy and avoidable risk factors.There is strong evidence that systemic fluconazole prophylaxis reduces the incidence of systemic fungal infections, with a trend towards reduction in mortality. However, the preprophylaxis incidence of fungal infection has been very high in the published studies. Fluconazole use is sometimes associated with cholestasis and there are theoretical concerns as well that prophylactic fluconazole will select for fluconazole-resistant organisms and nonalbicans Candida infections.There is reasonable evidence that oral nystatin is effective in preventing fungal infections and at the same time it is inexpensive and well tolerated.The reported incidence of systemic fungal infections is much lower in the UK than in the USA and Italy.Oral nystatin prophylaxis is inexpensive, effective and nontoxic and should be used routinely for babies of birth weight less than 1500 g. Systemic fluconazole, which is more toxic and may select for resistant fungi, is probably only indicated when the rate of fungal infection remains high despite introducing measures targeting known risk factors for fungal infection. These measures include introducing enteral feeds early, reducing the duration of parenteral feeding, and reducing the use of broad spectrum antibiotics, particularly cephalosporins.Future studies of prophylactic fluconazole should use oral nystatin, not placebo, as the comparator.