A unitary, multi-layer disposable undergarment such as a panty adapted for use in training infants or for use by incontinent adults or children is provided. The undergarment is constructed from a non-woven, stretchable fabric and comprises a front portion, a rear portion, a crotch portion, a self-fitting waist portion and self-fitting leg apertures. The preferred undergarment has an inner ply of stretchable fabric adapted to contact an infant's skin, a moisture-impervious or mositure retardant outer ply and an intermediate liquid-absorbent layer or panel disposed therebetween. The inner and outer plies preferably are constructed from a non-woven fabric which has been mechanically compressed to provide small pleats (micropleats) perpendicular to the machine direction and which has first been compacted in the cross direction to provide the desired stretch characteristics. The inner and outer plies are formed from substantially hour-glass shaped blanks having longitudinally oblong side cut-outs which blanks are cut from the micropleated, cross-compacted web so that the micropleats are disposed in the longitudinal direction of the blank to provide the desired stretch in the leg and crotch area.