Real-time ultrasound examinations of neonatal hips were performed to define the natural history of hip instability in the neonate. In clinically unstable hips, ultrasound confirmed displacement of the femoral head of variable severity that was usually bilateral even if unilateral instability had been diagnosed clinically. Ultrasound also revealed that the "reduction" after the Ortolani test may be spurious. Normal sonographic location resulted in all unstable hips that were splinted. In some unstable hips that were not splinted, resolution of sonographic displacement to normal was also documented. In other unstable hips that were unsplinted, persistent sonographic displacement occurred despite early resolution of clinical instability, and later treatment was required.