We report a case of neonatal lupus erythematosus (NLE) with congenital heart block and severe myocardial failure, which was followed from the 25th week of gestation because of fetal bradycardia. The child was delivered at the 37th week of gestation by elective cesarean section because of echocardiographically documented heart enlargement, pericardial effusion and moderate insufficiency of the mitral and tricuspid valves. In spite of immediate pacing, intubation and supportive treatment, the newborn developed progressive heart failure. Echocardiography showed endocarditis of the mitral valve and diffuse myocarditis. The heart failure resolved under steroid treatment. Our experience supports the early use of steroids in treating myocarditis due to NLE. Intrauterine steroid treatment in the presence of fetal hydrops and congenital heart block is discussed.