Arsenic toxicity is a global health problem affecting many millions of people. The main source of exposure is drinking water contaminated by natural geological sources. Current risk assessment is based on the recognized carcinogenicity of arsenic, but neurotoxic risks have been overlooked. In 1955, an outbreak of arsenic poisoning occurred among Japanese infants, with more than 100 deaths. The source was contaminated milk powder produced by the Morinaga company. Detailed accounts of the Morinaga dried milk poisoning were published in Japanese only, and an overview of this poisoning incident and its long-term consequences is therefore presented. From analyses available, the arsenic concentration in milk made from the Morinaga milk powder is calculated to be about 4-7 mg/L, corresponding to daily doses slightly above 500 microg/kg body weight. Lower exposures would result from using diluted milk. Clinical poisoning cases occurred after a few weeks of exposure, with a total dose of about 60 mg. This experience provides clear-cut evidence for hazard assessment of the developmental neurotoxicity. At the present time, more than 600 surviving victims, now in their 50s, have been reported to suffer from severe sequelae, such as mental retardation, neurological diseases, and other disabilities. Along with more recent epidemiological studies of children with environmental arsenic exposures, the data amply demonstrate the need to consider neurotoxicity as a key concern in risk assessment of inorganic arsenic exposure.