Transition from fetal to neonatal life is likely the most physiologically demanding time of life. Complex changes in major organ system functioning and reorganization of metabolic processes must occur rapidly to achieve postnatal homeostasis. Identifying the neonate with subtle signs of unsuccessful transition is a challenge to the perinatal health care provider. Alterations in fetal or neonatal heart rate and heart rate variability may serve as an indicator of the neural control influencing cardiac function and a sensitive indicator of compromised health. Evaluation of the neural control of the heart can be done noninvasively and provides a discriminating measure of the level of stress vulnerability the fetus or newborn may be experiencing. This article reviews the origins of physiological variability of the fetal and neonatal heart rate in the transition to extrauterine life. The technique of spectral analysis as a new tool for surveillance of the at-risk fetus and neonate is then introduced, and implications for clinical practice and future research avenues are discussed.