An accumulation of dead skin cells, skin oils and probably just plain 'ol dirt that forms on your scalp if you don't wash it regularly. Can also happen in you don't shampoo your hair.

Ever since I read the don't shampoo your hair writeup, I've been living in disgusted fear of cradle cap. Mind you, my hair is now less than an inch long all around, and I shampoo daily, being extra careful to scrub the scalp diligently. In fact, when I got my hair cut, I could feel the sebum from my scalp washing out the first time I washed it after that, because my hair was longer (3-4 inches) and I couldn't get at the scalp as well as I would have like. It wasn't a full grown cradle cap, but still, it grossed me out.

Now, to each their own, and I know people say with dreadlocks who probably have cradle cap as well, but I could never be one of them. Eeew. This is one aspect of personal hygiene that I'm a firm believer in modern technology and social practices.

Also called infantile seborrhoeic dermatitis, cradle cap is a temporary and harmless condition.

Caused by excessive oiliness of the skin and extremely common in babies, cradle cap usually appears during the first few weeks of an infant's life. It can be identified by greasy or crusty scaling patches that may appear yellow or gray, and is not unlike a mild form of eczema. In very rare cases only, the condition can spread to the face or body - if this happens, the baby should be taken to a doctor. The best treatment is brushing the hair with a fine-toothed comb in the morning; a mild baby shampoo can be used as well. If a doctor determines that the case is exceptionally severe, a weak hydrocortisone cream may be used. Although mineral oil can be used, it should be noted that some individuals believe applying oils to cradle cap actually makes the condition worse. Dandruff shampoos are too harsh for infants and definitely should not be used.

Sources
http://www.alternativeparenting.com/health/cradle_cap.htm
http://www.netdoctor.co.uk/diseases/facts/cradlecap.htm
http://www.medbroadcast.com/health_topics/womens_health/babies_moms/babies/index.shtml?cradle_cap.html

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