Dr. Greene’s Answer:
Just before a child is born, a burst of the mother’s hormones is passed to them. This is one of the finishing touches preparing their lungs to breathe air when they are born. These hormones include estrogen and androgens, and can have several transient side effects, which can sometimes include infant breast buds. Some little girls may have a cloudy white vaginal discharge, or even a mini-period – with blood appearing at the vagina during the first week as estrogen levels fall rapidly. Both boys and girls may develop newborn acne, between about 3 to 4 weeks of age.
When newborns have breast buds, real, mature breast tissue forms, creating firm lumps under the nipples. Some babies even leak some real milk from their breasts. This is colorfully named witch’s milk, a term which captures the magic of the situation, but inappropriately attributes sinister and supernatural overtones to this natural wonder. Breast buds commonly occur in children of both sexes.
Breast buds disappear gradually, usually over the first several months of life, as the hormones and their effects vanish. Unless the breasts become red, hard, or warm (indicating possible mastitis, or breast infection), breast buds are nothing to worry about.