In pregnant ewes, ovariectomized 3 weeks after mating and maintained with progesterone (7 mg./day) injected intramuscularly, there was excessive accumulation of allantoic fluid after 2 months of gestation. The addition of oestradiol benzoate (5 μg./day) or an increase in the dose of progesterone reduced the allantoic fluid volume to normal; this reduction depended on the dose of oestrogen and on the dose ratio of oestrogen to progesterone. Whilst oestrogen reduced allantoic fluid volume to normal, it increased the incidence of 'bovine' type of cotyledons which are not normally seen in ewes 2 months pregnant. The large allantoic volumes were apparently due to the absence of luteal rather than other ovarian tissue, since large volumes were also present in ewes maintained on 7 mg. progesterone/day after corpora lutea had been surgically expressed from the ovaries left in situ. Embryonic survival was adversely affected when corpora lutea were removed from the ovaries, but there was no clear effect on the morphology of cotyledons.