Why do all newborn babies have blue eyes?
At birth, the genes that make the pigment protein are not being read by the cell (they are turned off). Almost all babies have blue eyes because the iris has not yet made brown pigment (called melanin) that colors the iris.
As the child’s eyes are exposed to light (as they weren’t in the womb), the light then triggers the cell to start reading the gene. But it can take a while for the cell to ramp up to the final levels of pigment. That is why so many babies have blue eyes for their first months of life. Usually by their first birthday a baby’s eye color has settled in, but sometimes the iris doesn’t make enough melanin until about 3 years of age.
A nice description from About.com follows: “An infant’s eye color is determined by a substance called melanin. Melanin is a dark pigment contained in the iris, the structure that controls how much light is allowed into the eye. The color of the iris is determined by the amount of melanin in the iris. Light eyes have very little pigment, whereas darker eyes have a lot. In newborns, the pigmentation process of the iris is not yet complete. Babies with darker skin are usually born with dark eyes that stay relatively dark. Iris color in lighter-skinned babies is usually a blue or bluish-gray color at birth, then change as they grow. Melanin production changes during the first year of life, usually resulting in a darker, deeper eye color.”
Sources: Understanding Genetics at TheTech.org.