Objectives Lower birth weight within the normal range predicts adult chronic diseases, but the same birth weight in different ethnic groups may reflect different patterns of tissue development. Neonatal body composition was investigated among non-Hispanic Caucasians and African Americans, taking advantage of variability in gestational duration to understand growth during late gestation. Methods Air displacement plethysmography assessed fat and lean body mass among 220 non-Hispanic Caucasian and 93 non-Hispanic African American neonates. The two ethnic groups were compared using linear regression. Results At 36 weeks gestation, the average lean mass of Caucasian neonates was 2,515 g vs. that of 2,319 g of African American neonates (difference, P = 0.02). The corresponding figures for fat mass were 231 and 278 g, respectively (difference, P = 0.24). At 41 weeks, the Caucasians were 319 g heavier in lean body mass (P < 0.001) but were also 123 g heavier in fat mass (P = 0.001). The slopes for lean mass vs. gestational week were similar, but the slope of fat mass was 5.8 times greater (P = 0.009) for Caucasian (41.0 g/week) than for African American neonates (7.0 g/week). Conclusions By 36 weeks of gestation, the African American fetus developed similar fat mass and less lean mass compared with the Caucasian fetus. Thereafter, changes in lean mass among the African American fetus with increasing gestational age at birth were similar to the Caucasian fetus, but fat accumulated more slowly. We hypothesize that different ethnic fetal growth strategies involving body composition may contribute to ethnic health disparities in later life.