Data from epidemiologic studies and animal models have raised a concern that exposure to anesthetic agents during early postnatal life may cause lasting impairments in cognitive function. It is hypothesized that this is due to disruptions in brain development, but the mechanism underlying this toxic effect remains unknown. Ongoing research, particularly in rodents, has begun to address this question. In this review we examine currently postulated molecular mechanisms of anesthetic toxicity in the developing brain, including effects on cell death pathways, growth factor signaling systems, NMDA and GABA receptors, mitochondria, and epigenetic factors. The level of evidence for each putative mechanism is critically evaluated, and we attempt to draw connections between them where it is possible to do so. Although there are many promising avenues of research, at this time no consensus can be reached as to a definitive mechanism of injury.