The purpose of this study was to determine whether activation of the hypothalamic-pituitary-adrenal (HPA) axis and uteroplacental prostaglandin (PG) response occur before metabolic deterioration with a progressive decrease in fetal oxygenation. Twenty-one chronically catheterized fetal sheep were studied between 126 and 135 days' gestation during a 24-hour normoxic control period and subsequently during 4 experimental days of either prolonged and graded hypoxemia, induced by progressively lowering the maternal inspired oxygen concentration (induced hypoxia, n = 12), or continued study on room air (control, n = 6; spontaneous hypoxia, n = 3). Fetal arterial blood was sampled daily for blood gases and pH, immunoreactive ACTH, cortisol, and PGE2. Placental cotyledons were obtained at the end of the experiment for measurement of prostaglandin-H synthase (PGHS) enzymatic activity. For all hypoxia group measurements, progressive reduction in fetal oxygenation resulted in little change in either plasma ACTH or cortisol until arterial O2 saturation was close to 30% with metabolic acidosis onsetting. This was in keeping with activation of the HPA axis at this time, because ACTH and cortisol values showed a strong linear correlation (r = 0.77, P < .01). Fetal plasma PGE2 concentrations and cotyledonary PGHS enzymatic activity, although somewhat higher in the hypoxia group animals, were not changed significantly. In response to prolonged and graded hypoxemia in the ovine fetus, activation of the HPA axis occurs only when the degree of hypoxemia is pronounced and close to that associated with metabolic deterioration, which may limit the time for any uteroplacental response and the ability to initiate labor.