Rate of outflow from the confluens sinorum, a close approximation of rate of cerebral blood flow, was measured at term in rat fetuses and in neonates 3-18 hr after delivery. The CO2 tension of some mothers and neonates was elevated by breathing CO2-air mixtures. Fetal rate cerebral blood flow is twice that of adult rats but is promptly decreased to adult levels within 3 hr after birth. Rate of cerebral blood flow is enhanced by CO2 administration in both fetuses and neonates. Sensitivity to CO2 is equal to or greater than that of adult man in the range between 40 and 60 mm Hg. Carbon dioxide is a major factor regulating cerebral blood flow, and decreased PCO2 at birth can account for most of the 50% reduction in flow which occurs at that time. Rapid hemorrhage also resulted in reduced rate of cerebral blood flow.