Children exposed to the pesticide DDT while in the womb experience development problems, researchers say.
DDT is used to protect against malaria
The pesticide was banned in the US and UK in the 1970s, but it is still used in some countries to kill malaria-carrying mosquitoes.
It was already known DDT was linked to premature births and low birthweight.
The University of California Berkeley researchers say their findings, published in Pediatrics, should be borne in mind when addressing malaria.
DDT, an organochlorine, persists in the environment long after use, accumulating in the food chain and in fatty tissues of animals and humans.
Over time, it degrades into DDE and DDD, which have similar chemical and physical properties.
Thirty-three years after its use was banned in the US, DDT is still detectable in about five to 10% of people, while DDE is detectable in nearly everyone.
The UC Berkeley researchers measured blood levels of DDT and one of its breakdown products, DDE, in 360 pregnant women, the majority of whom were born in Mexico, where agricultural use of the chemical was only banned in 2000.
Factors including age, income, education, marital and work status, the child's gender, duration of breastfeeding and the quality of the home environment for young children were considered.
The researchers tested the mental and physical skills of the women's babies at six, 12 and 24 months using established tests to measure the children's development.
For each tenfold increase in DDT levels measured in the mother, the team found a corresponding two to three-point decrease in the children's mental development scores at 12 and 24 months.
Children with the highest DDT exposures in the womb were associated with a seven to 10-point decrease in test scores, compared to the lowest exposures.
When the children's physical skills were measured, there were two-point decreases in children's scores at six and 12 months for each tenfold increase in DDT levels in the mothers.
Similar, but weaker effects, were linked to DDE exposure.
The team also found that the longer babies were breastfed for, the better they scored on the developmental tests - even though they would have been exposed to DDT through the milk.
Dr Brenda Eskenazi, who led the research, said: "People need to consider these data if they are going to continue using DDT or reintroduce it in countries where it's been banned.
"Given the impact of malaria on child health, I'm not saying that we shouldn't use it.
"But if we do, we need to think of ways to protect women and children."
The researchers plan to continue to follow the children as they develop.
Professor Richard Sharpe, of the Medical Research Council's Human Reproductive Sciences Unit in Edinburgh, said: "The older the woman before her first breastfeeding episode and the longer and the higher her DDT exposure has been, the greater will be the amount of chemical delivered to the baby.
"So the first baby gets the worst of the chemicals stored in the mum's fat.
"There may also be a bonus to the mum in that she is ridding herself and her fat tissue of the chemicals in question and because some of these chemicals are potentially implicated in the development of breast cancer - the breast is mainly fat.
"This could be one of the ways in which early breastfeeding protects against breast cancer."