Both girls and boys can have swollen breasts that might express some milk -- possibly due to exposure to hormones in utero. For this reason, a baby girl's labia may also swell, and she might have a little bloody discharge. This is normal as long as it's just a tiny spot and doesn't persist.
On the other hand, swelling around a boy's genital area may be due to a hydrocele (a fluid-filled sac around the testes), so it makes the scrotum look enlarged. Hydroceles are more likely in premature babies and can be inherited, but any baby boy can be born with one. A hydrocele will usually resolve on its own within a year, but surgery is sometimes necessary. Contact your pediatrician if you notice a swelling, particularly a difference in the size of the two sides of the scrotum. --Sharon Anne Waldrop
Originally published in American Baby magazine, November 2007. Updated 2009