Vascular birthmarks are the most common birthmarks encountered in newborns. Many dermatologists are unfamiliar with the normal physiologic changes that affect and alter their appearance during early infancy. In this article we discuss normal newborn hemodynamic/neurovascular physiology and the associated clinical findings in neonatal skin. The physiologic anemia of infancy and its resultant effects on skin color and the appearance of vascular birthmarks are detailed. Finally, the pitfalls and obstacles to early diagnosis of vascular birthmarks and the subtle differences between them are reviewed, as are the challenges in assessing response to early pulsed dye laser treatment in the context of the changing vascular physiology.