Models for the thermal emission from dusty infalling envelopes around
protostars indicate that the envelope emission can greatly exceed the
stellar plus disk photospheric emission at wavelengths similar to 2 mu
m. We argue that this thermal envelope emission accounts for the weak
ness of 2.3 mu m CO first-overtone absorption lines in protostellar so
urces. Disk emission alone is unlikely to explain the observed effect,
either because disks exhibit their own CO absorption, or because inne
r disk holes eliminate the region of the disk that can emit in the nea
r-infrared. We find that this near-infrared veiling is very dependent
on the envelope density, increasing as mass infall rate increases and
centrifugal radius decreases. The veiling also depends on the characte
ristics of the underlying object, and it is largest when most of the l
uminosity is due to accretion and the disk hole size is several stella
r radii. The observed veiling indicates that dust must be falling in t
o distances of similar to 0.1 AU of the central star.