Prednisone is a steroid. It is known to cause birth defects in animals in high doses. Patients taking prednisone have a higher chance of having a child with low birth weight and may have a higher risk of stillbirth, but many successful pregnancies have been reported in women receiving prednisone. The fetus may be immunosuppressed by the prednisone and there is a report of congenital cataracts in an infant exposed to prednisone (adults on prednisone for long periods of time commonly develop cataracts). Overall there is not enough data to know how severe these effects are.
Prednisone does appear in breast milk in small amounts. The American Academy of Pediatrics feels it is acceptable to breastfeed while on prednisone.