A general characteristic of fetal endocrine maturation across different species is the enhanced activity of the fetal hypothalamic-pituitary-adrenal (HPA) axis during late gestation. Precocious activation of this axis may occur when the fetus is exposed to an adverse intra-uterine environment, such as hypoxemia. HPA development is associated with increased levels of ACTH(1-39) and adrenal corticosteroids (cortisol in sheep and human) in the fetal circulation, and increased expression of mRNA encoding corticotrophin releasing hormone (CRH) in the hypothalamus, proopiomelanocortin (POMC) in the pituitary, and key steroidogenic enzymes in the fetal adrenal. At term, increased levels of cortisol act on the placenta/trophoblast derived cells to increase expression of prostaglandin synthase Type II (PGHS-II). In human gestation, cortisol also decreases expression of 15-hydroxyprostaglandin dehydrogenase (PGDH) in chorionic trophoblast cells. Increased synthesis and decreased metabolism of prostaglandin (PG) results, during late gestation, in enhanced output of primary PG, which in turn increases the activity of 11beta-hydroxysteroid dehydrogenase (11beta HSD) in the human fetal membranes. Increased chorionic 11beta HSD-1 results in increased local generation of cortisol from cortisone, with further paracrine/autocrine stimulation of PG output. Increased fetal cortisol contributes to the maturation of organ systems required for postnatal extra-uterine survival. However, excessive levels of feto-placental glucocorticoid, derived from maternal administration of synthetic corticosteroids or sustained endogenous fetal cortisol production, results in intrauterine growth restriction. Fetal sheep, exposed to maternal betamethasone in late gestation, develop insulin resistance and exaggerated adrenal responses to HPA stimulation by 6-12 months postnatal life. Thus, the level of fetal HPA activity is crucial not only for determining gestation length, but may also predict pathophysiologic adjustments in later life. (C) 2001 Elsevier Science Ireland Ltd. All rights reserved.