Background: Rectal bleeding is a relatively uncommon, but potentially important problem in early infancy. The common causes of fresh rectal bleeding in this age group are: bleeding diathesis (vit. K deficiency), infectious colitis, cow’s milk protein allergy and anal fissure. Nodular lymphoid hyperplasia (NLH) is another cause of prolonged fresh rectal bleeding in early infancy. Objective: To evaluate the clinical presentation and outcome of infants with fresh rectal bleeding and final diagnosis of NLH. Methods: During a period of 3 years, from Sept. 1999 to Sept. 2002, 34 consecutive infants with prolonged fresh rectal bleeding were diagnosed as NLH and followed in our center. Results: There were 18 boys and 16 girls. The mean age of onset of rectal bleeding was 1.82 months and the mean age of diagnosis 4.25 months. None of the cases had any signs or symptoms of underlying systemic diseases. All cases showed resolution of bleeding and dramatic response to exclusion of cow’s milk and its by-products from mothers’ diet or replacement of babies' formula with hypoallergenic substitutes. By the age of one year all cases tolerated regular, unrestricted diets without recurrence of bleeding. Conclusion: NLH is an important cause of prolonged fresh rectal bleeding in early infancy. The disease is limited to rectosigmoid area in otherwise healthy infants without underlying disease. Excluding cow’s milk from mother's diet or changing of the infants' formula to hypoallergenic types is the best way of treatment. The long term prognosis of infants with NLH is excellent.